Tex.
Tax Code Section 23.231
Circuit Breaker Limitation on Appraised Value of Real Property Other than Residence Homestead
(a)
In this section:(1)
“Consumer price index” means the average over a state fiscal year of the Consumer Price Index for All Urban Consumers (CPI-U), U.S. City Average, published monthly by the United States Bureau of Labor Statistics, or its successor in function.(2)
“Disaster recovery program” means a disaster recovery program funded with community development block grant disaster recovery money authorized by federal law.(3)
“New improvement” means an improvement to real property made after the most recent appraisal of the property that increases the market value of the property and the value of which is not included in the appraised value of the property for the preceding tax year. The term does not include repairs to or ordinary maintenance of an existing structure or the grounds or another feature of the property.(b)
This section applies only to real property with an appraised value of not more than the amount determined under Subsection (j) for the tax year in which the property first qualifies for the circuit breaker limitation authorized by this section.(c)
This section does not apply to:(1)
a residence homestead that qualifies for an exemption under Section 11.13 (Residence Homestead); or(2)
property appraised under Subchapter C, D, E, F, G, or H.(d)
Notwithstanding the requirements of Section 25.18 (Periodic Reappraisals) and regardless of whether the appraisal office has appraised the property and determined the market value of the property for the tax year, an appraisal office may increase the appraised value of real property to which this section applies for a tax year to an amount not to exceed the lesser of:(1)
the market value of the property for the most recent tax year that the market value was determined by the appraisal office; or(2)
the sum of:(A)
20 percent of the appraised value of the property for the preceding tax year;(B)
the appraised value of the property for the preceding tax year; and(C)
the market value of all new improvements to the property.(e)
When appraising real property to which this section applies, the chief appraiser shall:(1)
appraise the property at its market value; and(2)
include in the appraisal records both the market value of the property and the amount computed under Subsection (d)(2).(f)
The circuit breaker limitation provided by Subsection (d) takes effect as to a parcel of real property on January 1 of the tax year following the first tax year in which the owner owns the property on January 1. The circuit breaker limitation expires on January 1 of the tax year following the tax year in which the owner of the property ceases to own the property.(g)
For purposes of Subsection (f), a person who acquired real property to which this section applies before the 2023 tax year is considered to have acquired the property on January 1, 2023.(h)
Notwithstanding Subsections (a) and (d) and except as provided by Subdivision (2) of this subsection, an improvement to real property that would otherwise constitute a new improvement is not treated as a new improvement if the improvement is a replacement structure for a structure that was rendered uninhabitable or unusable by a casualty or by wind or water damage. For purposes of appraising the property under Subsection (d) in the tax year in which the structure would have constituted a new improvement:(1)
the appraised value the property would have had in the preceding tax year if the casualty or damage had not occurred is considered to be the appraised value of the property for that year, regardless of whether that appraised value exceeds the actual appraised value of the property for that year as limited by Subsection (d); and(2)
the replacement structure is considered to be a new improvement only if:(A)
the square footage of the replacement structure exceeds that of the replaced structure as that structure existed before the casualty or damage occurred; or(B)
the exterior of the replacement structure is of higher quality construction and composition than that of the replaced structure.(i)
Notwithstanding Subsection (h)(2), and only to the extent necessary to satisfy the requirements of a disaster recovery program, a replacement structure described by that subdivision is not considered to be a new improvement if to satisfy the requirements of the disaster recovery program it was necessary that:(1)
the square footage of the replacement structure exceed that of the replaced structure as that structure existed before the casualty or damage occurred; or(2)
the exterior of the replacement structure be of higher quality construction and composition than that of the replaced structure.(j)
For the purpose of Subsection (b), for the 2024 tax year, the amount is $5 million. For the 2025 tax year, the comptroller shall determine the amount for purposes of Subsection (b) by increasing or decreasing, as applicable, the amount in effect for the 2024 tax year by an amount equal to $5 million multiplied by the percentage increase or decrease during the preceding state fiscal year in the consumer price index. For each subsequent tax year, the comptroller shall determine the amount for purposes of Subsection (b) by increasing or decreasing, as applicable, the amount in effect for the preceding tax year by an amount equal to that amount multiplied by the percentage increase or decrease during the preceding state fiscal year in the consumer price index, rounded to the nearest $10,000. The comptroller shall publish the amount in effect for a tax year under this subsection as soon as practicable after January 1 of the tax year.(k)
This section expires December 31, 2026.
Source:
Section 23.231 — Circuit Breaker Limitation on Appraised Value of Real Property Other than Residence Homestead, https://statutes.capitol.texas.gov/Docs/TX/htm/TX.23.htm#23.231 (accessed Apr. 20, 2024).
