Texas Bill Proposes 3% Homestead Appraisal Cap
State Rep. Jared Patterson's House Bill 563 would cut the annual homestead appraisal cap from 10% to 3%.
Updated on Nov. 13, 2026 in Taxes
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State Rep. Jared Patterson introduced House Bill 563 on November 9, proposing to lower the annual homestead appraisal cap from 10% to 3%. Senate Bill 298 is an identical companion measure, and the change would require voter approval through a constitutional amendment.
Why it matters
A lower appraisal cap could slow how quickly a homeowner's taxable value and tax bill rise, which matters to Texans facing rising property costs. The proposal is one of the early property tax measures filed ahead of the 2027 legislative session.
The bill would cut the homestead appraisal cap from 10% to 3%, while Dallas ISD's 2026 tax rate is $0.985735 per $100 of taxable value. Whether the measure will be enacted and approved by voters remains unresolved.
The players
Jared Patterson
Texas state representative from Denton County who introduced House Bill 563 proposing a 3% homestead appraisal cap.
The details
House Bill 563 changes the formula appraisal districts use to limit annual increases in the appraised value of a qualifying residence homestead while retaining the market-value ceiling and accounting for new improvements. The bill would take effect January 1, 2028, if enacted and approved by Texas voters through House Joint Resolution 38.
Timeline
September: Sen. Bettencourt's office released analysis on homestead school tax exemptions.
November 9: Rep. Patterson introduced House Bill 563.
January 1, 2028: Proposed effective date of the 3% appraisal cap.
January 2027: Texas Legislature convenes for the 2027 session.
Market Dynamics
The proposal would lower the existing 10% homestead appraisal cap to 3%, tightening the limit on annual increases in the appraised value of Texas homes. It follows earlier increases in homestead exemptions, after which about 39.2% of Texas residence homesteads paid no school property taxes.
If enacted and approved by voters, a 3% cap would limit how fast a homestead's appraised value can rise, which could slow growth in annual property tax bills starting in 2028. Homeowners should watch the 2027 legislative session to see whether House Bill 563 or Senate Bill 298 advances.
The takeaway
A lower appraisal cap would limit how quickly a homeowner's taxable value can climb, but it would only take effect if lawmakers pass the bill and voters approve the constitutional amendment. Homeowners should track the 2027 session to see how the proposal changes.
Further reading
For more on how these rules work, see the Texas Taxes section.
Source note: This article includes information reported by Dallas Express.
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