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The Texas real estate market has been hotter than our summer weather over the past year and a half, and housing inventory is at an all-time low. This has left many people looking for land with a little elbow room to build their forever home on. This housing challenge coupled with the explosion of acreage lot developments has created some unique property tax opportunities.
Maintaining an agricultural operation is a lot of work—and it’s not cheap, but leveraging an existing agricultural special valuation—commonly referred to as an ag exemption—for things like beekeeping or native bird and land preservation can result in significant property tax savings.
What is an ag exemption?
The Texas Constitution and Tax Code allow certain types of farm and ranch land to be appraised based on the land's agricultural productivity value, rather than market value.
According to the Texas Comptroller, “Landowners can apply for special appraisal based on the property's productivity value. The land's ability to produce agricultural or timber products determines the productivity value, which is usually lower than market value. Land used to manage wildlife may also qualify for special use appraisal.”
What qualifications does a property need in order to receive an agricultural exemption in Texas?
To qualify for this special valuation in Texas, the land in question must primarily be used—and must have been used for at least five of the past seven years—for agricultural purposes.
There is no minimum acreage to qualify according to the Texas Property Tax Code; however, individual appraisal districts set their own acreage guidelines. The typical minimum acreage for an agricultural exemption is ten acres.
Ag Exemption Example: Beekeeping
Running a full-blown cattle operation is a massive undertaking and having a herd of cattle grazing on your land significantly impacts the property. Many Texas landowners are receiving the same ag exemption with less effort by keeping bees. If you’re daunted by the idea of bees or aren’t an expert, you can even lease your property out to beekeeping service providers to qualify for the exemption.
What is a wildlife exemption?
If your property currently qualifies for an ag exemption by meeting the requirements listed below, you could get the same special valuation (and corresponding tax break) with significantly less effort and impact to your property by getting a wildlife exemption.
According to TexasLand, “Wildlife exemptions are an alternative form of ag exemptions, but with the same favorable tax implications. There are ways for a property to transfer directly from market value to wildlife valuation without being in ag, but they are uncommon. Other eligibility requirements relate to minimum acreage, active use, primary use, and level of intensity.”
What qualifications do you need to receive a wildlife exemption in Texas?
Your land must currently have an ag exemption or qualify for one. A wildlife exemption for the property requires actively using the land for wildlife preservation. Property owners must engage in at least three of seven wildlife management practices annually to keep a wildlife exemption in good standing.
Qualifying activities include:
- Habitat control (e.g., cedar clearing, native grass reseeding)
- Erosion control
- Predator control
- Providing supplemental water, supplemental food, or providing shelter for native wildlife such as deer and songbirds
- Taking census counts and surveys of native animal populations.
Wildlife Exemption Example: Native Songbird Land Preservation
The wildlife management practices should benefit a target species in your wildlife management plan. In Texas, you can get an exemption for preserving your land for use by native songbirds. For example, I recently purchased a five-acre residential lot in Bulverde, Texas that had been used for agricultural purposes for at least five of the last seven years. I was able to keep the agricultural exemption for the property by leasing it to a beekeeping service.
However, I’m planning on building a house on the property, soon, and was not looking forward to having a construction site with bees in the picture. I was able to get the same financial benefit of the ag exemption by applying for a wildlife exemption to preserve land for native Texas songbirds. I simply provide supplemental water and food and maintain a few nesting boxes.
Once approved, I’ll get to enjoy having beautiful songbirds on my property, help mother nature, and take advantage of big savings on my property tax bill. When I build my house, the appraisal district will take one acre out of the ag exempt property and assess market value taxes on the house and the land it sits on. The remaining four acres will be valued with the ag exemption.
What is the deadline to file for an agricultural or wildlife special valuation in Texas?
The deadline to file your request for this special valuation in Texas is April 30.
How much could you save with an agricultural or wildlife special valuation?
If your property qualifies, you could realize significant savings on your property taxes, but how much depends on several factors, including the designated ag or wildlife valuation for your property and its market value. Eligibility requirements and tax rates vary by county, so there is no one-size-fits-all formula, but in most cases, the savings are well worth the effort.
If you want to reduce your property tax burden, reach out to SWBC Ad Valorem Tax Advisors. For more information on how we can help you reduce the appraised value of your residence using extensive knowledge of exemptions, expertise in property tax protests, and other strategies visit our website.
Gary Rivas is a Texas licensed Senior Property Tax Consultant experienced in providing Industrial, Commercial, and Residential property tax reduction advisory services for real and personal property in Texas and multiple states across the country. He has 31 years of experience in the Property Tax Profession with 27 years as a Property Tax Consultant, and 34 years as a licensed Texas Real Estate Agent.