Houston Caps Property Tax Increases at 3 Percent for Homeowners Starting 2027

The Houston City Council approved the Property Tax Stabilization Ordinance on July 7, 2026. The measure applies directly to owner-occupied single-family homes and limits the annual increase in city property taxes to 3 percent.

City property tax assessments have risen in recent years after county appraisal districts updated values following new construction and market changes. The ordinance responds to those updates by setting a statutory cap that city finance staff will apply when calculating bills for the next fiscal year.

Daily impact on household costs

Residents who own and occupy their homes will see the cap applied to the city portion of their tax statement. For a household whose city tax bill was $2,800 this year, the city share next year cannot exceed $2,884 under the new limit. Renters may experience indirect effects if landlords adjust lease amounts to reflect stabilized city taxes on rental properties.

The legislation states that the cap covers only the municipal tax rate set by the city council and does not restrict Harris County or Houston Independent School District portions of the bill. Local advocates note that many households receive combined statements listing all three entities, so the city limit will appear as one line item.

Next steps for implementation

City staff will update the tax calculation software before the December 2026 billing cycle. Property owners can check eligibility by confirming homestead exemption status on file with the Harris County Appraisal District. The ordinance requires annual reporting to the council on the number of properties that receive the cap, with the first report due in March 2027.

Policy analysts say the change will be visible on tax statements mailed to approximately 380,000 homesteaded properties inside city limits. Residents with questions can contact the city finance department beginning in September 2026 for individualized bill estimates.