Texas HB38 modifies the interest rate for ad valorem taxes on certain residence homesteads during deferral or abatement periods.

Texas HB38 amends the Tax Code to change the interest rate for ad valorem taxes on certain residence homesteads during deferral or abatement periods. The annual interest rate will be the lower of the five-year Constant Maturity Treasury Rate reported by the Federal Reserve Board or five percent. This change applies to interest accrued before and after December 1, 2025, if the tax remains unpaid. The bill also preserves interest and penalties accrued before the deferral or abatement period and prevents penalties during these periods.

Texas HB38 modifies the interest rate for ad valorem taxes on certain residence homesteads during deferral or abatement periods.

Texas HB38 amends the Tax Code to change the interest rate for ad valorem taxes on certain residence homesteads during deferral or abatement periods. The annual interest rate will be the lower of the five-year Constant Maturity Treasury Rate reported by the Federal Reserve Board or five percent. This change applies to interest accrued before and after December 1, 2025, if the tax remains unpaid. The bill also preserves interest and penalties accrued before the deferral or abatement period and prevents penalties during these periods.