If you own a Texas rental house, a strip center, a small office building, or a vacant commercial lot, a quiet rule has been holding your appraised value in check for the past three years. It is called the circuit breaker limitation, and it caps how much the taxable value of most non-homestead real property can rise — no more than 20% a year. Here is the part almost no one is talking about: that cap expires on December 31, 2026. Unless lawmakers revive it, the 2027 appraisal season could hit non-homestead owners with value jumps the cap has been absorbing since 2024.
This is relief with an expiration date. Below is exactly what the cap does, who it protects, why it is set to vanish, and what its disappearance could mean for your bill.
What the circuit breaker actually is
The circuit breaker is a temporary limit the Legislature created in 2023 as part of Senate Bill 2 — the same $18 billion relief package that raised the homestead exemption. It is written into Texas Tax Code § 23.231. For each tax year it applies, an appraisal district cannot set a qualifying property’s appraised value any higher than the lesser of its market value or last year’s appraised value plus 20%, plus the value of any new improvements.
In plain terms: even if the market says your $1.2 million warehouse is now worth $1.6 million, the circuit breaker holds the taxable appraised value to a 20% increase. The appraisal district applies it automatically — there is no form to file, according to the Texas Comptroller.
Who it protects — and who it leaves out
The circuit breaker was built for the properties that don’t get the homestead exemption’s protections — the commercial and investment property that makes up a large share of the tax base in counties like Harris, Dallas, Tarrant, Bexar, and Travis.
It covers non-homestead real property at or below a value threshold that the Comptroller adjusts each year for inflation. Per the Comptroller’s valuing-property guidance, the maximum eligible value has been:
| Tax year | Maximum eligible appraised value |
|---|---|
| 2024 | $5,000,000 |
| 2025 | $5,160,000 |
| 2026 | $5,320,000 |
Several categories are specifically excluded. Homesteads don’t need it — they already have their own, permanent 10% appraisal cap under Tax Code § 23.23. Also excluded, per the Harris Central Appraisal District: agricultural land, timber land, recreational/park/scenic land, and public-access airport property. Property worth more than the year’s threshold gets no circuit-breaker protection at all.
The practical takeaway: this is the one broad appraisal cap that has shielded small-and-mid-sized commercial and rental owners — the landlord with a few houses, the family that owns its restaurant building — from the same kind of double-digit value spikes that homeowners are protected from every year.
Why it’s set to expire
The circuit breaker was never permanent. The Legislature authorized it as a three-year pilot program, for tax years 2024, 2025, and 2026 only. The Comptroller’s current guidance states it plainly: the limitation “expires Dec. 31, 2026.”
Lawmakers had a chance to extend it in the 2025 regular session. House Bill 202, filed for the 89th Legislature, would have struck the expiration date and made the cap permanent. It went nowhere: the bill was referred to a House subcommittee on Property Tax Appraisals on February 27, 2025, and saw no further action before the session ended on June 2, 2025. As of mid-2026, the Comptroller still lists the December 31, 2026 sunset — the strongest sign that no extension became law.
Because the cap is tied to a constitutional authorization voters approved in 2023, reviving it would take more than an ordinary bill — it would require both new legislation and another constitutional amendment on a future ballot. The next regular legislative session does not convene until January 2027, after the cap has already lapsed for the 2027 appraisal year.
What the expiration could mean for your 2027 bill
When the circuit breaker lapses, appraisal districts will once again be free to move a non-homestead property’s appraised value all the way to full market value in a single year — no 20% ceiling in between. For an owner whose property’s market value has outrun its capped value over the past three years, the catch-up in 2027 could be steep.
Consider a simplified example. A commercial building appraised at $2,000,000 in 2023, whose market value climbed faster than 20% a year, would have had its taxable value held down by the cap through 2024, 2025, and 2026. Once the cap disappears for 2027, the appraisal district can reset that value to current market in one step — and the tax bill follows. (This is an illustration of how the mechanism works, not a forecast of any specific property’s value; your county appraisal district determines actual figures.)
How much that stings depends on local tax rates and how far market values have run. You can see your county’s adopted rates on our county pages — for example Collin County or Denton County — and compare them against your appraisal notice when it arrives in spring 2027.
A note on the bigger relief picture
It is worth keeping two threads straight, because they are easy to confuse. Texas homeowners just got more relief, not less: in November 2025, voters approved Proposition 13, raising the school-district homestead exemption from $100,000 to $140,000, retroactive to the 2025 tax year, along with a larger exemption for seniors and Texans with disabilities (Proposition 11), as Ballotpedia documents. Those homestead breaks are permanent features of the Constitution.
The circuit breaker is the opposite story. It is the piece of the 2023 package built to expire — and it protects exactly the property that the homestead exemption does not. If you only follow the headline relief numbers, you could miss that one of the protections you rely on is scheduled to switch off. For a fuller picture of how the homestead side works, see our guide to the Texas homestead exemption and the new law.
What to do next
- Know whether your property is even covered. The cap applies only to non-homestead real property under the year’s value threshold ($5,320,000 for 2026). If your homestead is your concern instead, your 10% cap is permanent and unaffected.
- Watch your 2027 Notice of Appraised Value closely. That is the first year the cap won’t apply. When it arrives, read it carefully — our guide to the Notice of Appraised Value explains what each line means and your deadline to protest.
- Protest if the jump looks unjustified. Even without the cap, you can challenge a value you believe exceeds market. A property tax consultant may be worth it for higher-value commercial property.
- Verify everything with your appraisal district. County appraisal districts apply the circuit breaker (and will stop applying it) — they are the authority on your specific property. Confirm your value and any limitation with your local CAD.
Sources
- Texas Comptroller of Public Accounts — Valuing Property (circuit breaker limitation, value thresholds, Dec. 31, 2026 expiration)
- Texas Tax Code Chapter 23 — § 23.231 (circuit breaker limitation) and § 23.23 (homestead 10% cap)
- Harris Central Appraisal District — Circuit Breaker Cap (covered and excluded property types; codifying sections)
- Texas Legislature Online — HB 202, 89th Regular Session (bill to make the cap permanent; last action Feb. 27, 2025)
- Ballotpedia — Texas Proposition 13 (2025), homestead exemption increase to $140,000