Proposing a constitutional amendment authorizing the legislature to provide that the appraised value of a parcel of single-family residential real property for ad valorem tax purposes for the first tax year in which the owner owns the property on January 1 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 property for subsequent tax years based on the inflation and population growth rates.

89th Legislature (2025) Introduced by Cody Vasut

Texas constitutional amendment capping home appraisals at purchase price with inflation-linked increases, reducing property tax growth for owners but shrinking revenue for schools and local services.

Referred to s/c on Property Tax Appraisals by Speaker

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Legislative bill overview

HJR 178 proposes a constitutional amendment that would allow Texas to assess newly purchased single-family homes at their purchase price for the first tax year, then cap subsequent annual appraisal increases to a formula based on inflation and population growth rates. This represents a significant shift from current law, where property is typically reappraised annually at current market value regardless of purchase price.

Why is this important

Property tax bills are largely determined by appraised values, so this amendment would directly affect homeowner tax obligations and tax revenue for local governments, schools, and other taxing entities. The proposal addresses concerns about rapidly rising property values pricing long-time homeowners out of their homes through escalating tax bills, but would also reduce tax base growth for public services in appreciating neighborhoods.

Potential points of contention

Local government revenue impact: Capping appraisal growth means school districts, counties, and cities receive less revenue from property value appreciation, potentially requiring tax rate increases or service cuts

Fairness between neighbors: Identical homes could have vastly different tax bills based solely on when purchased, creating perceived inequity and complicating assessments

Constitutional precedent: Texas has rejected similar "Proposition 13" style reforms multiple times; this requires voter approval and represents a fundamental change to property tax structure