Since 2023, Texas has capped how much the appraised value of certain non-homestead properties — commercial buildings, rental properties, and residential property without a homestead exemption, valued under $5 million — can increase in a single year, at 20%. That cap, created by Senate Bill 2 in 2023, was only ever meant to run through the 2024, 2025, and 2026 tax years. It expires December 31, 2026.
Why It Probably Won't Be Extended
The Texas Legislature meets in regular session only once every two years, and the next one doesn't convene until January 12, 2027 — nearly two weeks after the cap is already gone. Several bills to extend it were introduced in the last session, but none passed, and lawmakers let it lapse rather than act. Barring a special session called specifically to address it before year-end, property owners who've relied on this cap should plan for it to simply not exist starting January 1, 2027.
Who This Actually Affects
This cap was never about homesteads — homeowners with a standard homestead exemption have their own separate 10% appraisal cap, which isn't affected by this expiration. This is specifically about commercial property, residential rental property, and non-homestead residential property under $5 million. If your county's appraisal district has been holding back increases because of this cap, expect a larger single-year correction in your 2027 appraisal once it's gone — potentially the full gap between where the cap held your value and where the market actually is.
What to Do Before It Expires
If you own property that's benefited from this cap, this is the year to document your actual market value — recent comparable sales, an independent appraisal, anything that supports a lower number — before your county's appraisal district resets you to full market value with nothing holding it back. Filing a protest after a large jump is always harder than getting ahead of it.