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Bill

HB 398

Relating to the limitations on increases in the appraised value of certain property for ad valorem tax purposes.

89th Legislature (2025) Introduced by Carl Tepper

HB 398 limits how much property tax appraisals can increase annually in Texas, reducing tax bills but potentially cutting local government revenues and creating market inequities.

Referred to s/c on Property Tax Appraisals by Speaker
#propertyinterests--homestead(i0616) #taxation--property-appraisals&appraisaldistricts(i0792) #taxation--property-exemptions(i0793)
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WeVote Research Nonpartisan
Bill Summary · HB 398

Legislative bill overview

HB 398 proposes to modify how property tax appraisals are conducted in Texas by limiting increases in appraised values for ad valorem tax purposes. The bill restricts how much a property's appraised value can increase year-to-year, similar to existing homestead exemption protections but potentially broader in scope. This affects the tax base calculation that determines property tax bills for homeowners, businesses, and other property owners.

Why is this important

Property tax appraisals directly determine how much property owners pay in taxes annually. Rapid increases in appraised values can significantly raise tax bills, particularly in appreciating real estate markets, affecting housing affordability and business operating costs. Texas has seen substantial property value appreciation in recent years, making appraisal growth limitations a timely fiscal issue for taxpayers and local governments that depend on property tax revenue.

Potential points of contention

  • Revenue impact on local governments: Capping appraisal increases reduces property tax revenue for schools, cities, and counties, potentially requiring service cuts or alternative funding sources
  • Market distortion concerns: Artificial appraisal caps may create inequities where identical properties pay different taxes based on purchase timing, and could affect property sales and market transparency
  • Scope ambiguity: The bill's exact limitations and which property types it covers remain unclear without seeing the full text; homestead exemptions already exist, raising questions about what's being newly restricted

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

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