Texas Property Tax · Changes for 2027

The Texas 20% Appraisal Cap Expires in 2026

For the last three years, a temporary state law has quietly limited how fast the taxable value of most non-homestead property could rise. It ends on December 31, 2026. If your property has been sheltered by it, your 2027 bill is set to jump — not because the county reappraised you, but because the shelter goes away.

Most owners have no idea it applies to them, because it works silently. Nothing on your bill says "you are being protected." You just quietly pay less than the market value would suggest.

What the cap actually is

Senate Bill 2 (2023) added Section 23.231 to the Texas Tax Code, creating what is usually called the circuit-breaker limitation. For tax years 2024 through 2026, it caps the annual increase in a property's appraised value at 20%.

It applies to non-homestead real property valued at roughly $5 million or less — the threshold is adjusted for inflation each year and sat at $5,160,000 for 2025. That covers most rental houses, small retail and office buildings, restaurants, warehouses, and raw land held by individuals and small LLCs.

It is a separate thing from the 10% homestead cap under Tax Code 23.23, which is permanent and unaffected. If you live in the property, this page is not about you.

Why 2027 is different

Section 23.231 expires by its own terms on December 31, 2026. Under current law there is no cap for the 2027 tax year, which means the full market value on the appraisal roll becomes taxable in one step.

The gap does not phase out. It unwinds all at once.

That matters most for properties where the county's market value has run far ahead of the capped value — which is exactly the situation the cap was created to soften. The bigger the shelter has been, the bigger the correction.

What that looks like in real numbers

These are actual Texas parcels, taken from county appraisal district records for 2026. Owner names are withheld, but the figures are public record and the rates are the real combined rates for those specific parcels.

A San Antonio retail building

Market value on the 2026 roll: $835,190. Because of the cap, the taxable value is only $357,924 — the county is taxing about 43% of what it says the property is worth. At that parcel's combined rate of roughly 2.27%, the 2026 bill lands near $8,130. With the cap gone and the value unchanged, that becomes about $18,971. An increase of roughly $10,800 in a single year.

A commercial tract on the I-35 corridor

Market value $1,686,690, taxable value held at $867,491. At about 1.58%, the bill moves from roughly $13,722 to $26,680. The building on it has not changed at all since 2021 — the county's own records show the improvement value flat. Every dollar of the increase is land.

The extreme case — unimproved land

A tract in an unincorporated part of the Metroplex carries a 2026 market value of $1,278,878, up from $34,540 in 2021. The cap has been letting the taxable value climb in 20% steps and it has only reached $59,686. The 2025 tax bill on it was $807. At the same rate with no cap, the full value produces a bill near $20,754.

That is not a typo. Land parcels that were cheap in 2021 and got reassessed hard are the most exposed properties in the state, because the cap has been absorbing years of increases that all land at once.

How to tell whether this affects you

Pull up your property on your county appraisal district's website and find two numbers:

If the assessed value is lower than the market value, you are capped, and the difference is your exposure. Some districts show it explicitly as a line called "circuit breaker cap loss" or "CBL cap loss."

One caution worth knowing: some appraisal district summary panels report a cap loss of $0 while the per-jurisdiction table further down the same page shows a lower taxable value. When the two disagree, the jurisdiction table is usually the one the tax office bills from.

What to do before April

The 2026 protest deadline has passed and nothing will change this year's bill. But 2027 is the year the cap comes off, and the protest window opens when notices go out in April and generally closes May 15.

The value worth protesting is the market value, not the capped one. That is the number the cap has been climbing toward, and the number that becomes taxable. Getting it corrected before the cap lapses is the difference between a one-time correction and paying on an inflated value every year afterward.

If the land portion of your value has run far ahead of the building — a common pattern when an appraisal district resets land values across a whole corridor at once — that is a protestable argument on its own, separate from the cap.

Find out what your 2027 exposure is

Send the address. We'll pull the market and taxable values, tell you what the cap is currently shielding, and what it looks like when it lapses. Free, no obligation.

No obligation. We never sell your data.

Common questions

Does this apply to my homestead?

No. Homesteads have their own separate 10% cap under Tax Code 23.23, and that one is permanent. The 20% circuit-breaker cap applies only to non-homestead real property — rental houses, small commercial buildings, retail, land and similar.

What if my property is worth more than $5 million?

Then the cap never applied to you, and nothing changes in 2027. The limitation only covers non-homestead real property at or below the threshold, which was $5,160,000 for 2025 and adjusts with inflation.

Could the Legislature extend it?

Possible, but not something to plan around. The 89th Legislature did not extend it, and the next regular session doesn't convene until January 2027 — after the cap has already lapsed. Extending it would also require a voter-approved constitutional amendment, not simply a bill.

I bought the property recently. Does the cap still apply?

A change of ownership generally ends the limitation as of January 1 of the following year, which is why some recently sold properties already show taxable value equal to market value. If you bought in the last couple of years, check both numbers — you may already be paying the full amount.

County-specific protest help

Bexar · Dallas · Tarrant · Collin · Denton

Texas protest deadlines guide · How to read your appraisal notice

This page explains general Texas property tax law and is not legal or tax advice. Figures cited are from county appraisal district records for the 2026 tax year, which are preliminary until certified, and use 2025 adopted tax rates. Your own situation depends on your parcel, jurisdiction and exemptions.