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Bill

HB 963

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

89th Legislature (2025) Introduced by Steve Toth

HB 963 would limit annual increases in residential homestead appraisals for Texas property taxes, reducing homeowner bills but potentially cutting school and local government funding.

Referred to s/c on Property Tax Appraisals by Speaker
#propertyinterests--homestead(i0616) #propertyinterests--realproperty(i0595) #taxation--property-appraisals&appraisaldistricts(i0792) #taxation--property-exemptions(i0793)
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WeVote Research Nonpartisan
Bill Summary · HB 963

Legislative bill overview

HB 963 proposes to limit how much the appraised value of a primary residence can increase annually for property tax calculation purposes in Texas. The bill would cap appreciation assessments on homesteads, similar to existing homestead exemption protections but potentially with stricter growth restrictions. This relates to ad valorem (property value-based) taxation, which funds local schools and services.

Why is this important

Property tax appraisals directly affect homeowner tax bills and housing affordability. Texas has seen significant property value appreciation in recent years, particularly in urban areas, causing tax bills to surge even when nothing changes about the property itself. This bill addresses a core complaint from homeowners facing substantial annual tax increases despite stable economic circumstances.

Potential points of contention

  • Revenue impact on local services: Schools, counties, and municipalities rely on property tax revenue for operations; capping appraisal increases reduces funding for teachers, infrastructure, and emergency services
  • Market distortion: Value caps may create inequities where identical properties pay different taxes based on purchase timing, potentially discouraging home sales and market efficiency
  • Burden-shifting: If homestead values are capped, tax burden may shift to commercial properties, renters (through higher rent), or other taxpayers to maintain service funding

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

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