bill freezing homestead taxable value

The text as introduced · 1,188 words

89R628 MLH-D

By: Middleton
S.B. No. 477

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 [ 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 is equal to [ an amount not to

exceed the lesser of:

[ (1) ] the market value of the property for the first

[ most recent ] tax year that the owner qualified the property for an

exemption under Section 11.13 [ market value was determined by the

appraisal office; or

[ (2) the sum of:

[ (A) 10 percent of the appraised value of the

property for the preceding tax year;

[ (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 qualified the property for an exemption under Section

11.13 and the owner acquired the property as a bona fide purchaser

for value, the appraised value of the property is equal to the

purchase price of the property paid by the owner.

(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, the appraised value of the property as shown on

the 2025 appraisal roll is considered to be:

(1) the market value of the property for the first tax

year that the owner qualified the property for an exemption under

Section 11.13 for purposes of Subsection (a); and

(2) the purchase price of the property paid by the

owner for purposes of Subsection (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-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)

or (a-1), as applicable [ (a)(2) ].

(c) The limitation provided by Subsection (a) or (a-1) 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) or (a-1) 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. Sections 23.23(e), (f), and (g), Tax Code, are

repealed.

SECTION 3. This Act applies only to ad valorem taxes imposed

for a tax year beginning on or after the effective date of this Act.

SECTION 4. 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 is the market value of the property for the first year that

the owner qualified the property for a homestead exemption or, if

the owner purchased the property, the purchase price of the

property is approved by the voters. If that amendment is not

approved by the voters, this Act has no effect.