TexasLast checked: October 28, 2026
The Texas homestead appraisal cap
Tax Code 23.23 lets an appraisal office increase a residence homestead's appraised value for a tax year to an amount not exceeding the lesser of two amounts. One is the market value for the most recent tax year it was determined, and the other is the sum of 10 percent of the preceding year's appraised value, that appraised value, and the market value of new improvements. This page describes the rule, not any one property's value.
This page describes what Tax Code 23.23 says about the limit on increases in a residence homestead's appraised value, and how the appraisal records and the notice of appraised value list market value. It does not say whether a property is eligible or what any property's value will be. Who provides this service is on the about page. How pages are made is in the editorial policy. Last checked: October 28, 2026.
What does Tax Code 23.23(a) say?
Tax Code 23.23 is titled Limitation on Appraised Value of Residence Homestead.
Subsection (a) says an appraisal office may increase the appraised value of a residence homestead for a tax year to an amount not to exceed the lesser of two amounts.
It applies regardless of whether the appraisal office has appraised the property and determined the market value of the property for the tax year.
| Amount | What the statute says |
|---|---|
| Amount 1: 23.23(a)(1) | The market value of the property for the most recent tax year that the appraisal office determined the market value. |
| Amount 2: 23.23(a)(2) | The sum of three items, listed below the table. |
The second amount is the sum of these three items.
- 10 percent of the appraised value of the property for the preceding tax year.
- The appraised value of the property for the preceding tax year.
- The market value of all new improvements to the property.
Reading the text as written, the statute sets a ceiling on the appraised value that an appraisal office may place on a residence homestead for the tax year, and the ceiling is the lesser of the two amounts.
The statute does not say how the ceiling works out for any one property, and this page does not either.
How are market value and appraised value listed?
Under Tax Code 23.23(b), when appraising a residence homestead the chief appraiser appraises the property at its market value.
The chief appraiser also includes in the appraisal records both the market value of the property and the amount computed under subsection (a)(2).
Tax Code 1.04(7) defines market value as the amount at which a property would transfer for cash or its equivalent under prevailing market conditions, if it is exposed for sale in the open market with a reasonable time for the seller to find a purchaser.
The definition adds two more conditions: both the seller and the purchaser know of all the uses and purposes to which the property is adapted and capable of being used, and both seek to maximize their gains with neither in a position to take advantage of the exigencies of the other.
Section 1.04(8) defines appraised value as the value determined as provided by Chapter 23 of the Tax Code.
Under Tax Code 25.19(f), the notice of appraised value for real property lists separately the market value of the land and the total market value of the structures and other improvements on the property.
The other parts of that notice are laid out on the notice of appraised value page, and the dates for filing a protest are on the protest deadline page.
Which property does the limit apply to?
Tax Code 23.23(c) says the limit takes effect as to a residence homestead on January 1 of the tax year following the first tax year the owner meets the conditions for an exemption under Tax Code 11.13 for the property.
It expires on January 1 of the first tax year that neither the owner of the property when the limit took effect nor that owner's spouse or surviving spouse meets the conditions for an exemption under Section 11.13.
Under subsection (c-1), an owner who receives an exemption as provided by Tax Code 11.42(f) is considered to have met the conditions for the exemption as of January 1 of the tax year following the tax year in which the owner acquired the property.
Subsection (d) says the section does not apply to property appraised under Subchapter C, D, E, F or G of Chapter 23.
Tax Code 11.13(j)(1) defines a residence homestead as a structure, including a mobile home, or a separately secured and occupied portion of a structure, together with the land, not to exceed 20 acres, and the improvements used in the residential occupancy of the structure if they have identical ownership, that meets four conditions.
- It is owned by one or more individuals, either directly or through a beneficial interest in a trust the statute defines in subsection (j)(3).
- It is designed or adapted for human residence.
- It is used as a residence.
- It is occupied as the individual's principal residence by an owner, by an owner's surviving spouse who has a life estate in the property, or, for property held through such a trust, by a trustor or beneficiary of the trust who is eligible for the exemption.
The Comptroller's exemptions page says a property owner must apply for an exemption in most circumstances, that applications are filed with the appraisal district in the county where the property is located, and that the general deadline for filing an exemption application is before May 1.
It adds that appraisal district chief appraisers are solely responsible for determining whether property is eligible for an exemption.
The residence homestead exemption amounts are set in Tax Code 11.13 and are separate from the limit in 23.23: subsection (b) provides a school district exemption of 140,000 dollars of the appraised value of an adult's residence homestead, and subsection (c) provides an additional 60,000 dollars for an adult who is disabled or 65 or older.
Subsection (n) lets a taxing unit adopt a percentage exemption before July 1, with a 5,000 dollar minimum and a percentage that may not exceed 20 percent.
What counts as a new improvement?
Under Tax Code 23.23(e), a new improvement is an improvement to a residence homestead made after the most recent appraisal of the property that increases the market value of the property and whose value is not included in the appraised value 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.
Tax Code 23.23(f) says an improvement that would otherwise be a new improvement is not treated as one if it is a replacement structure for a structure that was rendered uninhabitable or unusable by a casualty or by wind or water damage, except as provided in subdivision (2).
Under subdivision (2), the replacement structure is considered a new improvement only if its square footage exceeds that of the replaced structure as it existed before the casualty or damage, or its exterior is of higher quality construction and composition than that of the replaced structure.
Subsection (g) adds that, only to the extent necessary to satisfy the requirements of a disaster recovery program run by the General Land Office or by a political subdivision with community development block grant disaster recovery money, a replacement structure is not considered a new improvement even where it is larger or of higher quality.
How is this different from the school tax limit?
Tax Code 23.23 limits how far an appraisal office may increase a residence homestead's appraised value, as shown above.
A separate provision, Tax Code 11.26(a), says a school district may not increase the total annual amount of ad valorem tax it imposes on the residence homestead of an individual who is 65 or older, or disabled, above the amount it imposed in the first tax year the individual met the conditions for the exemption in Tax Code 11.13(c).
The second rule is described on the school district tax limit page.
Sources
- Texas Tax Code. Section 1.04, Definitions Section 11.13, Residence Homestead Section 11.26, Limitation of School Tax on Homesteads of Elderly or Disabled Section 23.23, Limitation on Appraised Value of Residence Homestead Section 25.19, Notice of Appraised Value Read: October 28, 2026.
- Texas Comptroller. Property tax exemptions Read: October 28, 2026.
Questions
What is the 10 percent in the homestead cap?
In Tax Code 23.23(a)(2)(A), 10 percent of the appraised value of the property for the preceding tax year is one of three items that are added together in the second amount.
Does the limit apply to market value?
The text of Tax Code 23.23 refers to the appraised value that an appraisal office may place on the property, and subsection (b) requires the chief appraiser to appraise the property at market value and to record both the market value and the amount computed under subsection (a)(2).
When does the limit start?
Tax Code 23.23(c) says it takes effect on January 1 of the tax year following the first tax year the owner meets the conditions for an exemption under Tax Code 11.13.
Is a repair a new improvement?
No. Tax Code 23.23(e) says a new improvement does not include repairs to or ordinary maintenance of an existing structure or the grounds or another feature of the property.
Does this page say what a property's appraised value will be?
No. It describes the text of the statute and does not say whether a property is eligible or what any property's appraised value will be.
Join the 2027 list
Texas Property Protest is a service of The Ambrose Group. Joining now is for the 2027 list.