Texas Legislature proposes tax amendment to cap property appraisals at 105 percent

House Bill 1898, introduced in Texas on January 16, 2025, seeks to address the rising concerns over property taxes by proposing a constitutional amendment that would allow the legislature to cap the maximum appraised value of real property for ad valorem tax purposes at 105 percent of the previous year's appraised value. This measure aims to provide financial relief to property owners amid escalating property values and taxes.

The bill's main provision hinges on voter approval of the proposed amendment. If the amendment is not approved, House Bill 1898 will have no effect, making its future contingent on public support. This aspect has sparked notable debates among lawmakers, with proponents arguing that the cap would protect homeowners from sudden tax increases, while opponents express concerns about potential impacts on local government funding and services.

Economic implications of the bill are significant, as it could alter the landscape of property taxation in Texas. Supporters believe that limiting appraised values could stabilize housing costs and make homeownership more accessible. However, critics warn that such a cap might lead to reduced revenue for municipalities, potentially affecting public services like education and infrastructure.

As discussions continue, experts suggest that the outcome of this bill could set a precedent for future property tax legislation in Texas. The potential for voter backlash against rising taxes may drive support for the amendment, but the concerns regarding local funding could complicate its passage. The next steps will involve public discourse and legislative action as the bill moves through the Texas House.