What Is Cap Value (10% Homestead Cap)?

Definition
Under Texas Tax Code Section 23.23, the assessed value of a homesteaded property cannot increase by more than 10% per year, regardless of how much the market value rises. The capped value is calculated as last year's assessed value plus 10%, plus the value of any new improvements.

Why This Matters for Your Protest

The homestead cap is one of the most valuable protections for Texas homeowners, especially in fast-appreciating markets. However, protesting your appraised (market) value is still important even if you are under the cap. If you do not protest and the market value climbs unchecked, the gap between your capped value and market value grows. When you eventually sell or lose your homestead, that full market value snaps back, and the next owner (or you, in a different scenario) pays taxes on the higher number.

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