Texas County's Ag Tax

By Author: Curtis Reddehase
Total Articles: 15
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Many times clients wanting to buy rural land are interested in the property tax breaks given to owners who use their land for livestock, crops or even conserving wildlife. Long-standing Texas laws provide these exemptions. But they are not really exemptions, rather they are special appraisal designations for land used for agricultural or wildlife uses. Agricultural appraisal lowers the taxable value of land used for farming or ranching operations. It values rural land based on the land's capacity to produce crops, including orchards, or livestock, instead of it's higher value on the real estate market. In order for land to qualify for agricultural appraisal, it must have been used for agricultural production for at least five of the past seven years. Hunting is not an agricultural use of land. The land is not eligible for agricultural appraisal during the five-year history period. You do not have to show income from the land's agricultural use during the five-year history period or after you qualify for agricultural appraisal. If you grow crops or raise cattle or horses, the law does not require you to sell them.

After ...
... meeting the five out of seven year history requirement, the land owner must show that they are devoting their land to an agricultural use that is typical in that county. State laws do not say what typical use is in each county (number of cows, horses, goats, etc. per acre, crop yield per acre, etc.). Instead the county chief appraiser sets the typical use standards, called degree of intensity, based on local agricultural practices, soil types, and climatic conditions. In addition, the chief appraiser may not arbitrarily set minimum sizes of acreage. He or she may, however, adopt guidelines that include minimum tract sizes for each class or sub-class of land, based on the principal uses of the tracts and upon the general intensity of a typical operation.
For example, the chief appraiser may determine that--based on the type of land and soil prevalent within the county -- 5 acres of grazing land would support a cow and a calf.

Many land owners today are not interested in raising livestock or growing crops but still want a tax break for conserving wildlife. The law provides a tax break for this use of land too, called wildlife management. The tax break is the same as the break given for agricultural land. However, the law requires that a person's land must have been qualified and appraised as agricultural land the year before the person changes the land's use to wildlife management use. So if you buy property that did not receive agricultural appraisal the year before you purchased it, you cannot immediately qualify the land for wildlife management use appraisal. You may convert the property's use to wildlife management after qualifying for agricultural use appraisal. The law says to qualify for wildlife management use, a person must perform at least three of seven wildlife management activities on the land. The activities include: habitat control, erosion control, predator control, providing supplemental supplies of water, providing supplemental supplies of food, and providing shelter.

It is important to remember that agricultural use and residential use are not compatible uses of land. In Texas, for the homestead exemption you can include up to 20 acres of your land if you use the land for residential purposes. Many appraisal districts often grant homesteads on one or two acre home sites. If the appraisal district grants you agricultural appraisal, the special appraisal will not apply to any portion of your property used as a homestead. In addition, the district will appraise any structures on your land - barns, sheds, silos and other farm outbuildings - separately from the land at market value.