Explaining The 10% Homestead Cap

There is no limit to what the appraisal district can raise the MARKET VALUE on property.  This is because the appraisal district is required by law to appraise property at 100% of market value meaning: What property is selling for.  The tax code states property that has a Homestead Exemption can only be taxed at 10% more than the previous tax year if the Market Value increases more than 10%.  This only applies typically to the Homesteaded Residence and Homesite land.  All other structures and land are not included in the Homestead 10% Cap and are taxed at Market Value regardless of how high the Market Value increased.

Example:

2023 Market Value of Homesite improvements and land =$179,660

2024 Market Value of Homesite Improvements and Land =$229,964

            $179,660 + 10%=$197,626 Maximum Allowed to be taxed for 2023 regardless if the Market Value increased to $229,964.  Each year the taxable amount would increase 10% until it reaches the Maximum Market Value.

Example $197,626 +10%=$217,388 for the next year and so on until you reach Market Value

The only exception to this is if new structures or improvements such as pools, outdoor kitchens, detached garage, or additions to the residence is added.  The new improvements would be taxed the first year at full Market Value.