Relating to the determination of the capitalization rate to be used in the appraisal for ad valorem tax purposes of certain property used for low-income housing.

HB 4478 requires Texas appraisal districts to publicly post their methodology for calculating capitalization rates used in property tax appraisals for low-income housing developments before finalizing the rate each year. The bill mandates that this methodology cannot rely solely on changes from the prior year’s rate and must include current market economic data relevant to the area. This affects appraisal districts (which determine property taxes) and property owners of qualifying low-income housing units by adding transparency and public input to the rate-setting process. The law applies to tax years beginning January 1, 2026, and requires districts to provide a public comment period after posting their methodology.