TX HB963

Replaces the current 10% annual cap on homestead appraisal increases with a new limit tied to inflation, allowing appraised values to increase only by the percentage change in consumer purchasing power in Texas

Sets the initial appraised value for newly purchased homesteads at the actual purchase price paid by a bona fide purchaser, rather than the appraisal district's market value determination

Applies to existing homestead owners by treating their 2025 appraised value as the baseline starting point for the new inflation-based limitation system beginning in tax year 2026

Excludes certain transactions from the purchase price provision, including court-ordered sales, bankruptcy trustee sales, purchases from family members within two degrees of consanguinity, co-owner purchases, and government entity sales

Allows appraisal limitations to transfer through inheritance if the heir qualifies for the homestead exemption, and takes effect January 1, 2026, contingent on voter approval of an accompanying constitutional amendment