State Assessment Caps Overview: How Property Tax Caps Work Across Major States
Last reviewed: May 2026 · Coverage: Texas, California, Illinois, New Jersey, New York, Florida, Massachusetts, Connecticut, Pennsylvania, Ohio, Georgia, North Carolina
Many states cap how fast assessed values can rise on owner-occupied homes. These caps are the dominant homeowner protection in some states (CA, TX) and incidental in others (IL, NJ, NY). This guide explains how the major caps work and why understanding yours matters.
Why caps exist
Property values in fast-appreciating markets can rise faster than household income. Without caps, long-tenured homeowners face rising tax bills they may not be able to afford while they're sitting on home equity they can't access without selling. Caps slow the year-over-year increase to a rate that aligns better with wage growth and household budgets.
Caps don't change market value — they change taxable value (what gets taxed each year).
The major caps in our coverage states
California — Proposition 13 (1978)
The strongest cap framework in the U.S.
- Tax rate cap: 1% of taxable value (plus voter-approved local debt service)
- Annual taxable-value cap: 2% maximum increase per year on factored base year value
- Reset trigger: change of ownership or new construction (sets a new base year value)
- Authority: California Constitution Article XIII A
- Statutory implementation: Cal. Rev. & Tax. Code §§50, 51
What this means: if you bought your home for $300,000 in 2005, your taxable value in 2026 (after 21 years of ≤2% factored increases) is roughly $445,000 — even if the market value is now $1.2 million. Your tax bill is calculated on the $445K, not the $1.2M.
This produces enormous divergence between long-tenured owners and recent buyers in appreciating markets. A homeowner who bought next door in 2024 at $1.2M pays tax on $1.2M; you pay tax on $445K. Both are correct under Prop 13.
Texas — 10% Homestead Cap
- Annual cap: 10% maximum increase per year on appraised value used for the tax bill, on owner-occupied homestead-exempt residences
- Authority: Texas Constitution Article VIII §1-b(d)
- Statutory implementation: Texas Tax Code §23.23
- Eligibility: must hold the homestead exemption for at least one full year before the cap kicks in
What this means: in fast-growth markets like Austin, Travis County, or Plano, market values can rise 15-25%+ in a single year during boom cycles. The 10% cap limits how much of that flows through to your tax bill. Homestead-protected owners pay tax on the cap-limited value; non-homesteaded properties (rentals, second homes, investment properties) pay on full market value.
Texas also has a related Circuit Breaker Limitation (HB 1956) for non-homestead real property under ~$5.16M (CPI-indexed) — 20% cap, currently authorized only for tax years 2024-2026, expires Dec 31, 2026 absent legislative extension.
Texas — Over-65 / Disabled Tax Ceiling
Separate from the 10% cap, Texas freezes school district taxes at the qualifying year's level for owner-occupied homesteads where the owner is 65+ or disabled (Tax Code §11.13(c)). The freeze applies only to the school district portion of the bill. Other taxing units' rates can still rise.
Illinois — Senior Citizens Assessment Freeze
- Mechanism: freezes the Equalized Assessed Value (EAV) at the base year value
- Eligibility: age 65+, primary residence, household income ≤ $75,000 for assessment year 2026 (rising to $77,000 for 2027 and $79,000 for 2028 per Public Act 103-0009)
- Note: this is technically not a cap on year-over-year increases (which IL doesn't have like CA/TX); it freezes the EAV entirely for qualifying seniors
- Annual recertification required — missing the renewal is one of the most common preventable losses for IL seniors
New Jersey — No general homestead cap
NJ does not have a general year-over-year cap analogous to CA Prop 13 or TX 10%. The closest mechanism:
- Chapter 123 Common Level Range (N.J.S.A. 54:3-22) — provides a procedural lever to bring assessment ratios into line with the municipal Director's Ratio, but isn't a cap on increases
- The CBT-judgment freeze (N.J.S.A. 54:3-26) — once a homeowner wins a CBT appeal, the reduced assessment is "frozen" for the assessment year and the next two succeeding years (subject to Director's Ratio adjustments). This is appeal-driven, not automatic.
New York — Various caps by jurisdiction
NY has no statewide cap, but several locality-specific tools:
- Tax cap (RPTL §3601): 2% (or rate of inflation, whichever lower) cap on year-over-year levy increases for school districts and many local governments. Voters can override.
- STAR (RPTL §425): reduces school assessed value by $30K (Basic) / $70.7K (Enhanced 2026) — reduces taxable value, doesn't cap increases
- NYC class share caps: NYC's tax classification system limits year-over-year shifts between property classes (1-4) — beyond the scope of our state cornerstones
Practical implications for homeowners
If you live in California
- Long tenure produces large taxable-value-to-market-value gaps. Don't appeal unless you bought recently or market value has dropped below your factored base year value (Prop 8 territory).
- Recently bought? Watch supplemental assessments (within 60 days of notice). Track market vs. base year for Prop 8 review opportunities.
If you live in Texas
- Hold homestead for one full year before benefiting from the 10% cap.
- New buyers face full market value first year — meaningful sticker shock during fast appreciation. The 10% cap kicks in year 2.
- Over-65? File the senior exemption to lock in the school district tax ceiling.
If you live in Illinois
- Senior Freeze is income-based (≤$75K 2026). Annual recertification required.
- No general year-over-year cap means assessed value can rise materially in revaluation years — protect yourself via PTAB appeal + §16-185 rollover.
If you live in New Jersey
- No general cap. Your protection is appeal-driven via Chapter 123 + CBT-judgment 2-year freeze.
- The 100% Disabled Veteran full exemption is the single largest property-tax lever in NJ for qualifying veterans.
If you live in New York
- No statewide cap, but the tax cap law limits year-over-year levy increases at most school districts.
- STAR (Basic + Enhanced) is available to most owner-occupied residences and reduces school taxable value.
- 2026 NEW: 100% Disabled Veterans full exemption.
State cornerstones for the full mechanics
The Property Tax Desk Editorial Team