89R2200 MLH-D
By: Flores S.B. No. 244
A BILL TO BE ENTITLED
AN ACT
relating to the limitation on increases in the appraised value of a
residence homestead for ad valorem tax purposes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 23.23, Tax Code, is amended by amending
Subsections (a), (b), and (c) and adding Subsections (a-1), (a-2),
(a-3), (a-4), (a-5), (a-6), (a-7), and (c-2) to read as follows:
(a) The appraised value of a residence homestead for the
first tax year that the owner qualifies the property for an
exemption under Section 11.13 is equal to the market value of the
property. Notwithstanding Section 23.01, the appraised value of
the property for each subsequent tax year until the tax year in
which the limitation provided by this subsection expires is equal
to [Notwithstanding the requirements of Section 25.18 and
regardless of whether the appraisal office has appraised the
property and determined the market value of the property for the tax
year, an appraisal office may increase the appraised value of a
residence homestead for a tax year to an amount not to exceed the
lesser of:
[(1) the market value of the property for the most
recent tax year that the market value was determined by the
appraisal office; or
[(2)] the sum of:
(1) [(A) 10 percent of] the appraised value of the
property for the preceding tax year; and
(2) [(B) the appraised value of the property for the
preceding tax year; and
[(C)] the market value of all new improvements to
the property.
(a-1) Notwithstanding Subsection (a), if the owner of real
property qualifies the property for an exemption under Section
11.13 and the owner acquired the property as a bona fide purchaser
for value, the purchase price of the property paid by the property
owner is considered to be the market value of the property for the
first tax year that the owner qualifies the property for the
exemption.
(a-2) If the first tax year the property owner qualified the
property for an exemption under Section 11.13 was a tax year before
the 2026 tax year:
(1) the property owner is considered to have qualified
the property for the exemption for the first time in the 2025 tax
year; and
(2) the appraised value of the property as shown on the
2025 appraisal roll is considered to be the market value of the
property for that tax year for purposes of Subsections (a) and
(a-1).
(a-3) Subsection (a-1) does not apply to a residence
homestead if:
(1) the purchase was made:
(A) pursuant to a court order;
(B) from a trustee in bankruptcy;
(C) by one co-owner from one or more other
co-owners;
(D) from a spouse or a person or persons within
the first or second degree of lineal consanguinity of one or more of
the purchasers; or
(E) from a governmental entity; or
(2) the chief appraiser determines that the applicant
was not a bona fide purchaser for value under criteria established
by rules adopted by the comptroller for that purpose.
(a-4) To receive a limitation on appraised value under
Subsection (a) computed in accordance with Subsection (a-1), an
owner of the property must apply for the limitation. To apply for
the limitation, the owner must file an application with the chief
appraiser for each appraisal district in which the property subject
to the claimed limitation is located. The application must be filed
not later than the latest date on which the owner may file an
application for an exemption under Section 11.13 on the property
for the year under Section 11.43. The comptroller by rule shall
prescribe the form for the application to ensure that the applicant
provides the information necessary to determine the applicant's
eligibility for the limitation, including the purchase price of the
property paid by the applicant.
(a-5) An application filed with a chief appraiser under
Subsection (a-4) is confidential and not open to public inspection.
The application and the information it contains may not be
disclosed to another person other than an employee of the appraisal
district who appraises property, except as provided by Subsection
(a-6).
(a-6) Information that is confidential under Subsection
(a-5) may be disclosed:
(1) in a judicial or administrative proceeding under a
lawful subpoena;
(2) to a purchaser, grantee, seller, or grantor named
in the application or in the deed to which the application applies
or to a representative of the purchaser, grantee, seller, or
grantor under a written authorization signed by the purchaser,
grantee, seller, or grantor;
(3) to the comptroller or to an assessor for a taxing
unit in which the property described in the application is located;
(4) in a judicial or administrative proceeding related
to real property taxation:
(A) to which the purchaser, grantee, seller, or
grantor is a party;
(B) to which an owner of the property described
in the application is a party; or
(C) by the appraisal district for the purpose of
establishing a value of the property or of providing evidence of
comparable sales to appraise another property;
(5) for statistical purposes if the information is
provided in a form that does not identify a specific property or
specific purchaser, grantee, seller, or grantor;
(6) if and to the extent that the information is
required to be included in a public document or record that the
appraisal office is required to prepare or maintain; or
(7) to a taxing unit or its legal representative that
is engaged in the collection of delinquent taxes on the property
described in the application.
(a-7) Information that is disclosed under Subsection (a-6)
does not lose its confidential character.
(b) When appraising a residence homestead, the chief
appraiser shall:
(1) appraise the property at its market value; and
(2) include in the appraisal records both the market
value of the property and the amount computed under Subsection (a)
[(a)(2)].
(c) The limitation provided by Subsection (a) takes effect
as to a residence homestead on January 1 of the first tax year
[following the first tax year] the owner qualifies the property for
an exemption under Section 11.13. The limitation expires on
January 1 of the first tax year that neither the owner of the
property when the limitation took effect nor the owner's spouse or
surviving spouse qualifies for an exemption under Section 11.13.
(c-2) Notwithstanding Subsection (c), a limitation
established under Subsection (a) does not expire if a change in
ownership of the property occurs by inheritance or under a will as
long as the person who acquires the property qualifies for an
exemption under Section 11.13.
SECTION 2. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2026, but only
if the constitutional amendment proposed by the 89th Legislature,
Regular Session, 2025, authorizing the legislature to provide that
the appraised value of a residence homestead for ad valorem tax
purposes for the first tax year that the owner of the property
qualifies the property for a residence homestead exemption is the
market value of the property and that, if the owner purchased the
property, the purchase price of the property is considered to be the
market value of the property for that tax year and to limit
increases in the appraised value of the homestead for subsequent
tax years based on the market value of all new improvements to the
property is approved by the voters. If that amendment is not
approved by the voters, this Act has no effect.