PART 6: What Are Property Tax Exemptions?

Hey so I’ve been doing a series on property taxes in Texas and we’re going to talk about AG exemption. It’s not in an actual exemption referred to as a 1D1 open space agricultural evaluation. That means that the land is taxed. At its productive AG value, not the full market value and layman’s terms. They they tax the dirt based on what it can produce, not what someone would pay to buy it. Or some states, especially Texas who have been land and AG driven since the dawn of time since they didn’t create an AG valuation to be nice. It’s because if AG land was taxed at developer pricing, working families would get taxed right out of their farm. Have a ranch growing next to a city because of its location. It’s worth millions upon millions to a developer. But the. Living on it. They’re living off of an agricultural income only. He earns a very meager living. You’re buying an agricultural property that already currently has an AG exemption. Please know that when you purchase it, it doesn’t automatically transfer over to the new owner. You have to reapply and you have to do that by April 30th. Many ways that you can qualify and it is definitely specific to the area that you live. But things like livestock, sheep, goats, OK producing crops like corn, cotton, rice, bees. If you’re going to beekeep wildlife management, which I could go off on a tangent alone on wildlife management and. Their own qualifications for them. For those of you who are familiar with it, let me do some math for you so you will understand just how significant the property tax savings are on this 27 acre tract of land. They have a market value of it about $205,000. It qualifies for special use because it has hay production on it. The actual assessed value is about $5000, the savings of almost $5000 in property taxes a year. So what you’ll see a lot of times in the country is people will buy 20 acres and then they will survey out one acre track and designate that as their homestead because it has their primary residence on it. And then the remainder of the property, they’re going to qualify it in some sort of special AG use. One of these categories that I talked about. Is that property tax value would be sky high. You need to keep that in mind whenever you’re looking for property outside of the city limits. Does it have an AG exemption on it currently is what are the qualifications? What are you going to do with that property? Because you don’t want to find out later that you lost your AG exemption. It doesn’t qualify. And then you could be potentially subject to rollback taxes, which is 2 years of backdated tax. Yes, there are people that do take advantage of it. But I live in a small rural community. I’m from a farm. Bring family so I could see first hand how important this is to farming communities they’re buying a place in. Your agent isn’t talking to you about some of the stuff you could be in for real property tax treat. If you have questions about any of this you need to go walk into your local appraisal district for the properties located and talk to them about the steps. They’re so helpful.