Texas Senate Advances Appraisal Cap Tightening to 3.5% as Property Tax Debate Heats Up

The Texas Senate voted 27-4 on April 11 to pass SB 780, which would lower the annual property tax appraisal cap from 10% to 3.5% for all residential and commercial properties. The bill represents the most aggressive property tax relief measure to advance through either chamber this session, going well beyond HB 1750's 5% cap that passed the House last week.

Senator Bryan Hughes (SD-1), who authored SB 780, called it 'the strongest property tax relief bill in Texas history' during floor debate. Hughes has made property tax elimination his long-term goal but framed the appraisal cap as an achievable interim step. Senator Robert Nichols (SD-3) voted in favor, noting that rapidly rising land values in East Texas timber country have pushed property tax bills to unsustainable levels for families on fixed incomes.

The gap between the House and Senate versions guarantees a conference committee, where the final number will be negotiated. Real estate industry groups, including the Texas Association of Realtors, have pushed back on both bills, arguing that aggressive appraisal caps will shift the tax burden to new construction and commercial properties. The Texas Comptroller's office estimates that a 3.5% cap would reduce local government revenue by $2.8 billion in its first year, raising questions about how school districts and counties will fill the gap.

Rep. Matt Schaefer (HD-6), who has championed eliminating the property tax entirely in favor of consumption-based taxation, praised the Senate bill but said it does not go far enough. Rep. Cole Hefner (HD-5) and Rep. Jay Dean (HD-7) both indicated they would support the Senate's 3.5% number in conference, while Rep. Travis Clardy (HD-11) said he favors a compromise in the 4-4.5% range to protect local government budgets.