Agriculture Tax, A Tax Credit That Could Apply to You

Everyone loves a good exemption on their taxes. Giving the government less and more money in our pockets; isn’t that what we look forward to every April 15th? For those who live in the hill country or rural areas, there is one tax exemption you might not have considered: an agriculture tax exemption. If the land you own qualifies for an agriculture appraisal, the credit you could possibly obtain can reduce the taxable value of your land and owners may see substational savings.

In the state of Texas there are two types of agriculture tax benefits property owners may benefit from. The most qualified exemption for land owners is a 1-d-1 appraisal which is better known as an open space valuation. The second type of credit is called a 1-d or agricultural use which typically applies to farmers and ranchers where fifty percent of the income comes from crops and animals. When considering which exemption to apply for, keep in mind that the savings does not come from the potential value in the real estate market but rather your lands value and the ability to serve as a function for wildlife, crops, livestock and in some cases, timber.

For landowners who are applying for the agricultural exemption, begin by speaking with your local county tax assessors’ office and obtain the correct paperwork to file a request for an ag exemption.  A land owners’ property may qualify for an appraisal if the land has previously been used for agricultural use, protects species that are federally listed, or used for conservation projects allowed by the state. In addition, an open space appraisal promotes the preservation of open space land.

Upon completion of the application, be sure to submit your request for county review by April 30th of the year you are applying for the appraisal. In some instances if your land has been purchased from a master planned country community, you will need to fill out the 1-d-1 from and provide a copy of the lease of your property which leases your land back to the community where wildlife will be roaming. This is an important detail when considering the exemption and additionally where land is being leased back to the community, only one acre of land surrounding your house may fenced. After filing the correct paperwork, a chief appraiser will evaluate your application and the land for which the request is being made.  Once the chief appraiser grants the agricultural exemption land owners will not have to apply again unless the purpose of the land use changes.

If you live in an area where you qualify for an agricultural tax credit be sure to apply and take advantage of the savings you could be earning. Your local county tax assessors’ office will be happy to help you with the necessary paperwork and the steps in completing your application.

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