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HB 294

Relating to an exemption from ad valorem taxation of the amount of the appraised value of certain residential real property that arises from the installation in the property of certain energy efficiency-related improvements.

89th Legislature, 2nd Called Session (2025) Introduced by Barbara Gervin-Hawkins

Texas bill exempts home value increases from energy efficiency upgrades from property tax calculations, encouraging green improvements while reducing local tax revenue.

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#energy--conservation(i0317) #energy--general(i0315) #propertyinterests--realproperty(i0595) #taxation--property-appraisals&appraisaldistricts(i0792) #taxation--property-exemptions(i0793)
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Bill Summary · HB 294

Legislative bill overview

HB 294 would exempt homeowners from paying property taxes on the increased home value resulting from energy efficiency improvements. The bill creates a tax break by allowing homeowners to exclude the appraised value increase caused by installing eligible energy-related upgrades (such as solar panels, insulation, HVAC systems, etc.) from their ad valorem tax calculations.

Why is this important

Rising property values from home improvements can trigger higher tax bills, which discourages homeowners from making energy efficiency investments that would otherwise reduce utility costs and environmental impact. This exemption could incentivize residential energy upgrades while providing tax relief to property owners making sustainable improvements.

Potential points of contention

  • Revenue loss: Cities and school districts depend on property tax revenue; this exemption could reduce funding for local services unless offset elsewhere
  • Valuation complexity: Determining the exact value attributable to energy improvements versus other factors may create administrative burden and disputes during property appraisals
  • Equity concerns: The benefit primarily advantages homeowners with capital to invest in improvements, potentially creating disparities between wealthy and lower-income neighborhoods
  • Definition scope: The bill's reference to "certain" improvements leaves open questions about which upgrades qualify and who determines eligibility

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

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