Texas Circuit Breaker Expires Dec. 31, 2026: What Rental Owners Will Pay in 2027
Texas' temporary 20% appraisal cap on rentals and other non-homestead property expires Dec. 31, 2026. Here's who it hits in 2027, how to check your property and what to do before notices arrive.
Key Takeaways:
- Texas' 20% circuit breaker cap on non-homestead property expires December 31, 2026.
- It covered rentals, second homes and other non-homestead real property valued at $5.32 million or less in 2026.
- Your 2027 taxable value can jump to full market value. The gap on your 2026 notice is your exposure.
- HB 1622 and SB 322, the 2025 bills to extend it, died in committee.
- 2027 protest deadline: May 17, 2027, or 30 days after your notice.
Reviewed November 9, 2026.
Quick answer: Texas' 20% "circuit breaker" cap on rentals, second homes and other non-homestead property worth $5.32 million or less expires December 31, 2026 (Texas Comptroller). Starting with 2027 appraisals, your taxable value can jump straight to full market value. If your 2026 notice shows a market value higher than your appraised value, that gap gets taxed in 2027. Bills to extend the cap died in 2025.
Check yours: grab two numbers from your 2026 notice and run them through the circuit breaker tax surge calculator below. It takes about two minutes.
General information, not legal or tax advice.
What is the Texas circuit breaker?
Think of it as a speed limit on your taxable value. In plain English: no matter how fast the market climbed, the appraisal district could only raise the value you're taxed on by 20% a year.
Lawmakers created it in Senate Bill 2 during the 2023 second special session, as a three-year pilot (SB 2 bill analysis). It kicked in for the 2024 tax year.
The math is simple. Your appraised value is the lower of:
- this year's market value, or
- last year's appraised value, plus 20%, plus the value of any new improvements.
Example from the Harris Central Appraisal District: last year's value was $1,000,000. This year's market value is $1,250,000. The cap holds the taxable value to $1,200,000. The extra $50,000 waits in the wings (HCAD).
A few rules:
- No application. Appraisal districts applied it automatically.
- One full year of ownership. You had to own the property on January 1 of the prior year.
- Homesteads don't count. Your primary home keeps its own 10% cap, which isn't going anywhere.
- Farm, ranch and timber land under special appraisal is excluded.
- Selling ends it. The new owner starts over at market value.
When does the 20% appraisal cap expire?
December 31, 2026. The statute says it plainly: "This section expires December 31, 2026" (SB 2). Texas values property as of January 1. So your 2027 value is set with no circuit breaker at all.
Did Texas extend the circuit breaker?
No. Two 2025 bills tried:
- HB 1622 would have made the 20% cap permanent. It was referred to a subcommittee in March 2025 and died there (bill status).
- SB 322 would have tightened the cap to 10% and stretched it to 2031. It died in committee too (bill status).
Special-session proposals, like a bill to cut the cap to 8% (HB 84), didn't become law either. The Comptroller still lists the expiration as December 31, 2026 (Comptroller).
Could lawmakers bring it back? Maybe. They meet January 12, 2027. But the original cap needed a constitutional amendment and a statewide vote. A revival likely would too. Budget writers also sound tapped out. "We're kind of maxed out at what we can do for property tax reform, from a budget perspective," said Sen. Charles Perry (Community Impact).
My take: plan as if it's gone. If Austin rescues you later, great. Bonus money.
Who gets hit hardest in 2027?
Not everyone. The cap only saved you money in years your market value rose faster than 20%. If your appraised value already matches your market value, nothing snaps back.
Most at risk:
- Rentals the appraisal district revalued sharply in 2024, 2025 or 2026.
- Property in fast-growing suburbs and exurbs, where values climbed quickly.
- Lots and small acreage where land values jumped.
- Duplexes, small apartment buildings and small commercial property under the $5.32 million limit.
No cliff for you if:
- It's your homestead. The 10% homestead cap stays.
- You bought it during 2025 or 2026. The cap never applied to your 2026 value, so you're already taxed at market.
- Your 2026 market value and appraised value are the same.
- It's worth more than $5.32 million. It never qualified.
How big is this? Nobody has published a statewide count. The best look comes from Rice University's Baker Institute. It studied five counties (Collin, Harris, Midland, Moore and Smith). In 2024 alone, the cap removed $4.2 billion in value from their tax rolls (Baker Institute). In Harris County, researchers counted about 44,767 properties under the cap that year (TTARA panel, Nov. 2024). That was year one. Gaps can stack up over three years.
How much could my property taxes go up?
Rough math:
(2027 market value − 2026 appraised value) × your tax rate = your likely increase.
Three hypothetical rentals, all at a 2.2% combined tax rate and a flat 2027 market:
Three similar rentals, three very different 2027 bills. The gap decides it.
Tax rates may shift a little. When capped value returns to the rolls, cities and school districts have more value to spread the levy across. The Baker Institute found the cap nudged rates up slightly in all five counties it studied. Don't count on the reverse to save you, though. It's small, and your city or school district sets the rate.
How do I check if my rental will see a big tax increase?
- Find your appraisal district. Use the table below, or the calculator's address lookup.
- Search your address on the district's property search.
- Open the 2026 values. Look for two numbers: market value and appraised value. Some districts call the second one "net appraised" or "capped" value. Your April 2026 notice shows both.
- Subtract. Market minus appraised is the value the cap held back. That's your 2027 exposure.
- Find your tax rate. Add up every line on your 2026 tax bill. $2.20 per $100 of value is 2.2%.
- Plug it in. The calculator below does the rest.
Circuit breaker tax surge calculator
Enter your address to find your appraisal district. Then add your 2026 market value, appraised value and tax rate. You'll see your estimated 2027 change and a risk rating.
Prefer a full-screen version? Open the circuit breaker calculator page.
Texas appraisal district lookup links
Search your address, then open the 2026 values. Not listed? Use the Comptroller's county directory.
What should Texas landlords do before 2027 notices arrive?
- Run every property. Portfolio owner? Sort by the biggest gap first. That's where the money is.
- Budget for it now. 2027 bills are due January 31, 2028. If you escrow, expect a shortage notice. Price lease renewals with the new number in mind.
- Start your evidence file. Your 2027 value is set as of January 1, 2027. Take dated photos of anything worn or broken. Save repair bids, your rent roll, vacancy and operating statements. For small apartment buildings and commercial property, income and expenses matter a lot.
- Protest your 2027 notice. More on why below.
- Don't sell just to dodge it. A sale ends the cap anyway. Buyers start at market value.
- Watch Austin, but don't wait on it. The deadline to protest arrives before any new law likely would.
Why your 2027 protest matters more than ever
Here's the part most landlords miss. Under the cap, winning a lower market value often saved you nothing.
Take Rental A. Market value $400,000. Capped value $330,000. Say you protested and got market value cut to $370,000. You were still taxed on $330,000. Savings: $0.
In 2027 there's no cap. That same $30,000 cut saves about $660 a year at 2.2%. Every dollar you knock off market value now hits your bill.
I've owned rentals in Texas since 2012, including Dallas and Sherman. I'm running my own numbers too. The owners who show up in May with evidence will feel this a lot less.
For what it's worth, 92% of TaxDrop's closed 2026 Texas protests got a reduction (174 of 189).
Actual 2026 protest results. Savings estimated at a ~2.2% effective rate. Individual results vary.
Rather not do this for every door?
TaxDrop's licensed Texas property tax consultants pull your values, build the evidence and file your protest. Got several rentals? We handle the whole portfolio. Start with the free over-assessment check at app.taxdrop.com. It takes about a minute.
Keep reading: Is it worth appealing property taxes on a rental? · Property tax appeals for landlords with multiple rentals · How the 10% homestead cap works · Texas protest evidence checklist · Texas property tax protest guide · Pricing
County guides: Harris · Dallas · Tarrant · Bexar · Travis · Collin · Denton · Fort Bend · Williamson · Montgomery · Grayson
Sources: Texas Comptroller, Valuing Property; SB 2 (88th Leg., 2nd C.S.) bill analysis; HCAD circuit breaker cap; Travis CAD circuit breaker limitation; Baker Institute, The Surprising Impact of the 20% Appraisal Cap in Texas (2025); TTARA circuit breaker panel (Nov. 2024); HB 1622 status; SB 322 status; HB 84 text; Community Impact, Nov. 2025; Tax Code §41.44 (protest deadline).
Paying Too Much in Property Taxes?
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FAQs
When does the Texas circuit breaker expire?
December 31, 2026. The 20% cap under Texas Tax Code §23.231 covered only the 2024, 2025 and 2026 tax years. Values set on January 1, 2027 have no 20% cap.
Will my rental property taxes go up in 2027?
Only if your 2026 market value is higher than your 2026 appraised value. That gap was held back by the cap and can be added to your 2027 taxable value, along with any market change. If the two numbers already match, the cap ending changes nothing.
Did Texas extend the 20% non-homestead cap?
No. HB 1622, which would have made the cap permanent, and SB 322, which would have lowered it to 10% through 2031, both died in committee in 2025. The Comptroller still lists the expiration as December 31, 2026.
Does the circuit breaker ending affect my homestead?
No. Homesteads have a separate 10% appraisal cap that stays in place. The circuit breaker only covered non-homestead real property such as rentals, second homes, vacant land and small commercial property.
How do I know if the cap is lowering my taxes now?
Compare the market value and appraised value on your 2026 Notice of Appraised Value or your appraisal district's property page. If market value is higher, the cap is holding your taxable value down by the difference.
What was the circuit breaker value limit for 2026?
$5,320,000. The limit was $5,000,000 in 2024 and $5,160,000 in 2025, adjusted each year for inflation by the Texas Comptroller. Property valued above the limit didn't qualify.
I bought my rental in 2025. Am I affected?
Not by a cap cliff. You had to own the property on January 1 of the prior year to qualify, so a 2025 or 2026 purchase was taxed at market value in 2026. Your 2027 change depends on market value and tax rates.
When is the 2027 property tax protest deadline in Texas?
May 17, 2027, because May 15 falls on a Saturday, or 30 days after your appraisal notice is delivered, whichever is later.
Ryder Meehan
Ryder Meehan is the Co-Founder of TaxDrop and a Licensed Property Tax Protest Consultant
