Guide

Homestead caps and assessment limits: why taxable value can sit below market

A homestead cap limits how much a home’s taxable value can rise each year, so market value can climb well past taxable value, and a value appeal only lowers your bill when it brings the value below the capped figure.

Data as of 20 Oct 2026 · primary sources listed below

By Appealmetrics Research · Updated 20 Oct 2026 · How we check facts

How a cap works

The assessor still estimates market value every year. The cap then limits the value you are taxed on: in Texas a homestead’s appraised value may not rise more than 10% a year (Tex. Tax Code §23.23); in Florida a homestead’s assessed value may not rise more than 3% or the change in the CPI, whichever is lower (Fla. Stat. §193.155); in California the base-year value rises at most 2% a year (Rev. & Tax. Code §51); in Michigan taxable value rises by the lesser of 5% or inflation (MCL 211.27a).

In Florida, California and Michigan the limit resets when the home sells, so a new owner can be taxed on a much higher value than the neighbor who has owned for years.

Limits by state

States with a homestead cap or assessment limit (21 of 51)
State	Limit
Alabama	Class II and III assessed value may rise at most 7% a year, for tax years from October 1, 2024 through the year beginning October 1, 2027; not for new construction, reclassification or most sales (Ala. Code §40-7-2.2).
Arizona	Limited Property Value may rise at most 5% a year and never above Full Cash Value (A.R.S. §42-13301).
Arkansas	Amendment 79: homestead taxable value may rise no more than 5% a year until it reaches full assessed value (10% for other property); frozen for owners 65+ or disabled; caps end on sale, new construction or substantial improvement.
California	Factored base year value may rise no more than 2% a year (California CPI) until a change in ownership or new construction (Cal. Const. art. XIII A, §2(b); Rev. & Tax. Code §51(a)(1)).
District of Columbia	Homestead taxable assessment may rise no more than 10% a year (2% with senior or disability relief); applied as a credit and lost after a sale (D.C. Code §47-864).
Florida	Save Our Homes: a homestead’s assessed value may rise no more than the lower of 3% or the CPI change each year, and resets to just value after a change of ownership (Fla. Const. art. VII, §4(d); Fla. Stat. §193.155).
Georgia	Statewide floating homestead exemption (HB 581, 2024): increases in a homestead’s assessed value above the base year, adjusted by CPI (2.7% for 2026), are exempt. Local governments could opt out. SB 33 (2026) removes the opt-out from January 1, 2027, on a 2026 baseline. Many counties also have their own base-year homestead freezes.
Hawaii	Set by county. Kauaʻi limits increases on owner-occupied homes to 3% a year after two years of the same owner. Hawaiʻi County limits its Homeowner class to 3% a year. Honolulu has no cap, only a home exemption.
Iowa	Residential assessment limitation (rollback): taxable value = assessed value × a percentage the Department of Revenue certifies each fall so statewide residential taxable growth stays within 3% (Iowa Code §441.21(4)); 44.5345% for 2025. It caps aggregate growth, not an individual parcel’s value.
Louisiana	Special assessment level freezes the homestead assessment for owners 65+, certain disabled veterans and the permanently disabled, subject to an income limit ($100,000 indexed; $150,000 from 2027) (La. Const. art. VII, §18(G)); a homestead reappraisal increase above 50% is phased in over 4 years (§18(F)(2)).
Maryland	Increases are phased in equally over three years; decreases apply at once (Tax-Prop. §8-103). Homestead Tax Credit for an owner-occupied principal residence: taxable assessment growth over 10% a year is credited for State tax, and counties and municipalities set their own cap from 0% to 10% (Tax-Prop. §9-105). Requires a one-time application.
Michigan	Proposal A: Taxable Value rises by the lesser of 5% or inflation (2026 multiplier 1.027) and never exceeds SEV; it uncaps to SEV the year after a transfer of ownership (Const. art. IX, §3; MCL 211.27a(2)–(3)).
Minnesota	No cap on market value (Limited Market Value repealed, §273.11 subd. 1a). Homestead Market Value Exclusion (§273.13 subd. 35): 40% of value up to $95,000 (max $38,000), less 9% of value over $95,000, none at $517,200 or more; Taxable Market Value is EMV minus the exclusion.
Nevada	No limit on value. NRS 361.4723 abates the tax on an owner-occupied primary residence so the bill rises no more than 3% a year.
New Mexico	Residential value may rise no more than 3% a year (6.1% over two years); the limit lifts after a sale, new improvements or a change of use (NMSA 7-36-21.2). A separate freeze applies to qualifying owners 65+ or disabled (7-36-21.3).
New York	Special assessing units (population 1,000,000+, i.e. NYC): class one assessments may rise no more than 6% a year or 20% over five years, excluding physical improvements (RPTL §1805(1)). None elsewhere.
Oklahoma	Fair cash value of homestead-exempt property may not rise more than 3% a year (5% for other property); the cap lifts in the year title transfers, and improvements are added at fair cash value (Okla. Const. art. X, §8B). Owners 65+ under the income limit can freeze value (art. X, §8C).
Oregon	Maximum assessed value may rise no more than 3% a year, except for new property or improvements, partitions and rezoning (ORS 308.146; Or. Const. art. XI, §11). Applies to all property, not only homesteads.
South Carolina	Reassessment increases in market value are limited to 15% over five years, except for additions and in the year an assessable transfer is first taxed (S.C. Code §12-37-3140(B), Act 388 of 2006). Applies to all real property.
Texas	Homestead appraised value may not rise more than 10% a year (Tex. Tax Code §23.23).
Wyoming	Single-family residential assessed value may rise no more than 4% a year, except for new construction or a purchase in the prior calendar year (W.S. 39-11-105(a)(xliii) structure, (xliv) land). Separate exemptions: 25% of the first $1,000,000 of fair market value for an owner-occupied home (xlvi), and 50% of the first $3,000,000 for qualifying long-term owners 65+ (xlv).

Data as of 20 Oct 2026 · state statutes and revenue departments, per state page

What a cap means for an appeal

Suppose a Texas homestead has a market value of $400,000 and a capped appraised value of $330,000. Lowering the market value to $360,000 changes nothing you pay, because $360,000 is still above the capped $330,000. Only a reduction below $330,000 cuts the bill. Our savings estimates count only the part of a reduction that falls below the capped value.

A cap does not stop you appealing the market value: the market value is the ceiling the capped value grows toward, and a lower market value can matter in later years.

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