Relating to a limitation on increases in the appraised value of real property for ad valorem tax purposes.
If passed, HB375 would amend several sections of the Tax Code, particularly related to property appraisal and taxation. It alters existing methodologies for determining the market value of properties, mandating appraisal officials to adhere to the defined limits when setting appraised values for tax assessments. This change could lead to a more predictable and stable tax environment for property owners, particularly in areas experiencing rapid real estate growth.
House Bill 375 proposes to limit the increase in the appraised value of real property for ad valorem tax purposes. Specifically, it aims to set a cap on the annual increase of appraised values at a maximum of 3.5% over the prior year's appraised value, in addition to any new improvements to the property. This bill represents a significant shift in how property taxes could be calculated, potentially alleviating the tax burden on homeowners and property owners by preventing large jumps in taxable value year over year.
The proposal is likely to spark debate, as there are concerns about its financial implications for local governments, which rely on property taxes for funding essential services. Proponents argue that this measure protects homeowners from excessive taxation in a volatile real estate market. However, detractors may raise objections regarding potential revenue shortfalls for municipalities and how those deficits would be compensated, potentially leading to cuts in services or the imposition of alternative taxes.