How to File for an Ag Exemption in Texas

Landowners in Texas can lower their property tax bills through a special valuation based on agricultural use. Commonly called an “ag exemption,” this is not a true exemption but an alternative way of valuing land. Instead of being taxed on its market value, the land is appraised based on its ability to produce agricultural goods. This productivity value is much lower than market value, resulting in a reduced tax liability for the landowner.

Qualifying for Agricultural Valuation

To receive an agricultural valuation, the land’s primary and most significant use must be for agriculture. Qualifying uses include cultivating crops, raising livestock, poultry, or fish, and beekeeping for commercial purposes. It can also extend to producing timber or even managing wildlife, provided the land was previously qualified for agricultural use and is actively managed under a wildlife plan.

A requirement is that the agricultural activities must meet the “degree of intensity” standard for the local area. This standard, set by the county’s appraisal district, reflects the typical farming and ranching practices in that specific region. For example, it dictates the common stocking rate for cattle, such as the number of animal units per acre, or the standard planting and harvesting techniques for crops.

There is also a historical use component to qualification. The property must have been used for agriculture for at least five of the seven years preceding the application. For land located within the limits of an incorporated city or town, the rules are stricter, requiring that the land has been used continuously for agriculture for the five years immediately preceding the application.

Required Information and Forms

The Ag/Timber Number

Before applying for the property tax valuation, landowners often secure an Ag/Timber Number from the Texas Comptroller of Public Accounts. This registration number is for claiming sales tax exemptions on qualifying items purchased for producing agricultural and timber products for sale. The application can be completed online through the Comptroller’s website, which is significantly faster than mailed applications, as mailed forms can take several weeks to process. This number must be renewed periodically to remain active.

The Property Tax Valuation Application

The primary document for the special valuation is the “Application for 1-d-1 (Open-Space) Agricultural Use Appraisal,” which is filed with the County Appraisal District (CAD) where the property is located. This form is distinct from the Ag/Timber Number application and must be obtained from your local CAD. The form requires the owner’s name, contact information, a legal description of the property, and the total acreage. You must also provide a detailed description of both the current and historical agricultural uses, demonstrating the five-out-of-seven-year history. You may need to attach supporting documents, such as lease agreements or sales receipts, to substantiate the commercial nature of your operation.

The Application Submission Process

The completed “Application for 1-d-1 (Open-Space) Agricultural Use Appraisal” must be submitted directly to the chief appraiser of the County Appraisal District (CAD) for the county where the land is situated. It is important not to send this form to the Texas Comptroller’s office. Submission methods vary by district but typically include mailing, in-person delivery, or an online portal.

The standard deadline for filing the application is before May 1 of the tax year for which you are seeking the valuation. If you miss this deadline, you may still be able to file before the appraisal roll is certified in July. However, a late filing, if approved, will result in a penalty calculated as 10 percent of the tax savings you receive.

After submission, the CAD will review the application package. The appraisal district may contact you to request additional information or clarification. It is also common for the CAD to conduct a physical inspection of the property to verify its agricultural use. The landowner will receive a formal written notice of approval or denial from the chief appraiser.

Maintaining Your Agricultural Valuation

After receiving an agricultural valuation, the landowner has an ongoing responsibility to ensure the property remains in compliance. The land must continue to be used for agriculture and meet the degree of intensity standards established by the local county appraisal district. A new application is not required each year. Re-application is only necessary if the ownership of the property changes, the property’s acreage is altered, or the chief appraiser requests a new application.

A rollback tax is a financial penalty triggered when a landowner changes the use of the property from agricultural to non-agricultural, such as developing it for residential or commercial use. This tax recaptures the tax savings the owner benefited from due to the special valuation.

The rollback tax is calculated as the difference between the property taxes paid under the agricultural valuation and the taxes that would have been due based on the land’s higher market value. This calculation is applied to each of the three years preceding the year the land’s use changed. Interest is charged on this amount if the rollback tax bill becomes delinquent.