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HB 240

Relating to a limitation on increases in the appraised value of real property for ad valorem tax purposes.

89th Legislature, 1st Called Session (2025) Introduced by Cecil Bell

HB 240 caps annual property appraisal increases for Texas ad valorem taxes, limiting tax bills but potentially reducing government revenues.

Filed
#comptrollerofpublicaccounts(v2608) #propertyinterests--realproperty(i0595) #taxation--property-appraisals&appraisaldistricts(i0792) #taxation--property-exemptions(i0793)
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Bill Summary · HB 240

Legislative bill overview

HB 240 proposes to cap annual increases in appraised property values for property tax assessment purposes in Texas. The bill would limit how much a property's assessed value can rise year-over-year, regardless of actual market value changes. This directly affects the tax base used to calculate homeowner and business property tax bills.

Why is this important

Property tax assessments drive the amount Texas homeowners and businesses pay in annual taxes. Currently, appraisals can spike significantly when markets heat up, leading to sharp tax increases. A cap on appraisal growth would provide tax predictability for property owners but could reduce revenue available to schools, counties, and other taxing entities that depend on property tax income.

Potential points of contention

  • Revenue impact on public services: Schools and local governments fund operations partly through property tax revenue; capping appraisal growth could reduce available funding for education, infrastructure, and emergency services
  • Market distortion concerns: Artificial caps on assessed values create divergence between market reality and tax basis, potentially creating inequities between long-term and new property owners
  • Implementation complexity: Determining appropriate cap percentages, inflation adjustments, and exemptions requires detailed policy decisions that could create administrative burden or unintended consequences

Compiled from official sources — confirm details with the bill’s official record.

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