Is there a definition of “ag exemption” in Texas? In Texas, ag exemptions are only available for land that has been continuously used for agricultural purposes for at least five of the preceding seven years. The term “agricultural uses” is broadly defined to include raising crops and animals, as well as maintaining bees.
Only refinance your land loan if doing so will strengthen your financial position. In Texas, ag exemptions are only available for land that has been continuously used for agricultural purposes for at least five of the preceding seven years. The term “agricultural uses” is broadly defined to include raising crops and animals, as well as maintaining bees. In addition to the required acreage, several counties additionally take into account the agricultural intensity of the property.
Whether you’re a seasoned farmer or just starting out, if your land doesn’t already have an agriculture (AG) exemption, you should apply for one if you plan to raise cattle or grow hay. As a result, your land’s taxable value might be determined by its agricultural productivity rather than its current market price. It’s possible to save hundreds, if not thousands, of dollars in taxes due to the disparity between the two figures.
Some examples of agricultural uses that qualify for an agricultural valuation are growing hay, managing wildlife, and producing cattle. However, the specific county in which the property is located determines the applicable regulations. So, what are the initial steps?
Qualifications for AG Exemption Texas
Land that has been farmed for at least 5 of the last 7 years is a possible candidate. Such applications could be raising cattle, cultivating crops, maintaining bees, or anything similar. Agricultural uses have varying acreage requirements throughout counties.
Even though the minimum amount of land required to qualify for an AG Exemption differs depending on the county, the majority of the time, you will need at least 10 acres of land that is devoted to agriculture in order to take advantage of the decreased property taxes.
The majority of Texans probably picture cattle when they think of AG-exempt animals. Many other animal species, however, are welcome. Other species, such as goats, sheep, and bees, are also welcome to apply.
However, because of the variation across counties, you should research the specific rules and requirements that apply to your area. In order to do this, contact the appraisal district that has jurisdiction over the area where the property is situated. This link on the website of the Texas Comptroller is also a good place to search for the regulations that apply in your county.
School taxes, county taxes, hospital taxes, college taxes, etc., all contribute to a county’s overall tax rate, which varies from county to county. Then all those rates are added up as the property’s taxes. The money is deducted from the market value of the property. When people see a rise in their bill from the previous year, it is often due to a higher assessed market value rather than an increase in the rate itself. That is to say, while their tax rate may have stayed the same, the assessed value of their home may have increased from $150,000 to $190,000 over the course of four years. While market value is the standard for determining tax exemptions, the value of agricultural production is the determining factor in the case of AG exemptions. The financial benefits of this are substantial.
AG & Homestead Exemptions Texas
Unlike the Homestead Exemption, which can be used for both residential and agricultural purposes, the AG Exemption is limited to land that will be used for farming. As an additional point, a unique valuation more accurately describes what happens during an AG Exemption. The land’s value shifts from its real estate value to its potential agricultural output. The difference between the value of your land and the value of your products decreases your taxable income. To add to that, a Homestead Exemption allows you to reduce the value of your property by a fixed amount. A Homestead Exemption can be claimed by any homeowner for their primary dwelling. In contrast to an AG exemption, there is no mandatory waiting period. And there’s little effort involved in keeping it up-to-date or completing standards like an AG Exemption to keep it that way.
True Texas Ranches; AG Exempt Land Burnet County, Texas
The extra work required to secure an AG exemption is more than justified in the end. The tax disparity may be substantial. Most landowners are aware of the financial benefits and advantages of having an AG Exemption, and how it aids in the upkeep of a farm or ranch. Get in touch with True Texas Ranches in Burnet County right away!