Agricultural appraisal lowers the value of land owned by qualified farmers and ranchers. It values rural land based on the land's capacity to produce crops, livestock, or timber, instead of its value on the real estate market. This lower value reduces property taxes on the land.What land qualifies?
Taxpayers may qualify for agricultural appraisal under two different laws. The newer law is called "open-space valuation" or "1-d-1 appraisal" (after Article 8, Section 1-d-1 of the Texas Constitution). Nearly all land that receives agricultural appraisal is under this law. Details on the older law -- known as "1-d" or "agricultural use" -- are available from your appraisal district.
For "1-d-1 appraisal," the land must meet the following:
The land must be devoted principally to agricultural use. Agricultural use includes production of crops, livestock, poultry, fish, or cover crops. It also can include leaving the land idle for a government program or for normal crop or livestock rotation. Land used for raising certain exotic animals (including exotic birds) to produce human food or other items of commercial value and cutting wood for use in fences or structures on adjacent agricultural land also qualifies. Using land for wildlife management is an agricultural use. Such land was previously qualified open-space land and is actively used for wildlife management. Wildlife management land must be used in at least three of seven specific ways to propagate a breeding population of wild animals for human use. Contact your local appraisal office for details.
- Timberland must be used with the intent to produce income and be devoted principally to the production of timber.
- Both agricultural land and timberland must be devoted to production at a level of intensity that is common in the local area.
- The land must have been devoted to agricultural and/or timber production for at least five of the past seven years. However, land within the city limits must have been devoted continuously for the preceding five years, unless the land did not receive substantially equal city services as other properties in the city.
If your land qualified for agricultural appraisal and you change its use to a non-agricultural use, you will owe a rollback tax for each of the previous five years in which your land got the lower appraisal. The rollback tax is the difference between the taxes you paid on your land's agricultural value and the taxes you would have paid if the land had been taxed on its higher market value. In addition, 7-percent interest is charged for each year from the date that the taxes would have been due.
The chief appraiser determines if a change to a non-agricultural use has been made and sends a notice of the change. If you disagree, you may file a protest with the ARB. You must file the protest within 30 days of the date the notice was mailed to you. The ARB decides your case.
If you don't protest or if the ARB decides against you, you owe the rollback tax. The owner who changes the land's use gets the rollback tax bill.