05/15/2026
The Texas homestead cap is explained in Section 23.23 of the Texas Property Tax Code, titled “Limitation on Appraised Value of Residence Homestead.”
In plain language, the law says:
If a property has a residence homestead exemption, the appraised (taxable) value used for taxation cannot increase by more than 10% per year, plus the value of any new improvements.
The capped value is compared to market value, and the lower amount is used.
You may see your market value decrease for various reasons, and your taxable value increase, until the taxable meets the market.