Capped value (sometimes called "assessed value" or "limited value" on Texas notices) is the maximum amount your homestead can be taxed on after applying the 10% annual cap. It's different from market valueāand often lower.
Your Notice of Appraised Value shows both numbers: market value (what the county thinks your property is worth) and capped/assessed value (the amount actually used for taxes). If you have a homestead exemption, your taxable value can't increase more than 10% per year.
The difference between market value and capped value represents tax savings you're already receiving from the cap.
The capped value on your notice represents real savingsābut understanding it helps you make smart decisions about protesting:
Should you still protest if you're capped?
Yes. Reducing market value today affects future years. Even if your capped value is well below market value now, the cap will eventually catch up. Lowering market value keeps your long-term taxes lower.
The cap resets when you move:
Your new home has no cap protection until you've had a homestead exemption for a full year. Longtime Texas homeowners often face "tax shock" when they buy a new home and lose decades of cap protection.
Reading your Texas assessment notice:
Line 1 - Market Value: $520,000
What the county believes your home would sell for.
Line 2 - Capped/Assessed Value: $420,000
Your limited value after the 10% cap (based on $382,000 last year Ć 1.10).
Line 3 - Taxable Value: $320,000
After subtracting your $100,000 homestead exemption.
In this example, you're being taxed on $320,000 even though the county thinks your home is worth $520,000. The $100,000 cap savings plus the $100,000 exemption protect you from $200,000 in taxable value.
Market value is what the county thinks your property would sell for. Capped value is the limited amount you're actually taxed on, which can't increase more than 10% per year with a homestead exemption. Capped value is usually lower in rising markets.
No. The 10% cap applies automatically once you have a homestead exemption. File your homestead exemption, and cap protection follows. No separate application needed.
Yes. If your market value drops below your capped value, your assessed value becomes the lower market value. The cap limits increases, not decreases. You always pay on the lower of market value or capped value.