Do You Qualify for the Agricultural Property Tax Exemption?

Texas is a state that is full of land that is ripped and ready for agricultural use. However, many people entering the agriculture industry don’t realize that their land can actually be more fruitful than perceived.

Aside from the financial benefits of growing and distributing crops and timber, property owners can actually save money on property taxes through the local Agricultural Tax Exemption.

Here’s a look at who qualifies and why you should look into it as a local farmer.

What is the Agricultural Tax Exemption?

The agricultural tax exemption allows owners of agriculture and open space land to have their property appraised at lower levels. If an agricultural property consists of at least ten acres and was deemed exempt in the former tax year, it qualifies as an agriculturally exempt land.

If you reside on agricultural land, you may qualify to be exempt from other taxes that include:

  • State and local sales tax on farm related products
  • Motor vehicle sales and use tax for equipment you use on your agricultural land
  • Particular state franchise taxes

How Does Texas View the Value of Agricultural Land?

When determining the value of agricultural land for property taxes, the state does so by evaluating the actual productivity value of the land instead of the market value. Being taxed at productivity value allows the landowner to pay a significantly reduced amount of property taxes in comparison to the average commercial property owner.

Open Space Valuation and Who Qualifies

You may read this article and realize that you could be saving money every year on your property taxes. However, not everyone on agricultural or open-space land qualifies for an exemption.

In order to receive the tax exemption the land in question must have been devoted to agricultural use for the last 5 to 7 years. The following land uses allow your land to qualify for an agricultural tax exemption:

  • Farming or ranching with the purpose of agricultural sale
  • Fiber crop production
  • Timber production
  • Commercial fish farms
  • Bee keeping
  • Feed farm operations
  • Growing plants for commercial nursery sale
  • Crop dusting
  • Land where vocational agriculture training is taught

Who Doesn’t Qualify for the Tax Exemption?

Remember, not everything in open space qualifies for this lucrative tax exemption. Before you meet with a property tax consultant or apply online, make sure that you aren’t using your land for:

  • Home gardening
  • Horse boarding
  • Trail rides
  • Rodeos, zoos, or circuses
  • Predator control
  • Wildlife conservation
  • Commercial fishing
  • Pet breeding

The Hegwood Group Helps You Determine the Value of Your Agricultural Land

If you are an owner of agricultural land and are ready to start saving on your property taxes, the property tax consultants at the Hegwood Group can help! Whether you’re filing for an Agricultural Tax Exemption or eager to contest your property taxes, our services can benefit your needs. Contact us today to schedule a free consultation with a member of our team.

Saving money on property taxes