The Texas agricultural exemption — formally called the 1-d-1 open-space land appraisal — allows qualifying landowners to have their property appraised based on its agricultural productivity value rather than its market value. For land in high-value areas, this difference can be substantial, and losing the exemption triggers a rollback tax.
Instead of paying property taxes based on what the land could sell for on the market, qualifying landowners are taxed on what the land can produce through agriculture. The county appraisal district assigns a "productivity value" — often a small fraction of market value — and taxes are calculated on that lower number.
To qualify, the land must have been used principally for agriculture for the preceding five years (with some exceptions). The activity must be a bona fide agricultural use — including row crops, grazing livestock, hay production, orchards, fish farming, or beekeeping, among others. The landowner must apply through the county appraisal district.
Common qualifying uses include cattle grazing, crop production, goat or sheep ranching, exotic wildlife management under certain conditions, hay production, and commercial beekeeping. Wildlife management is also recognized when transitioning from traditional ag use.
The exemption must be renewed by demonstrating continued qualifying use. Records of agricultural activity, receipts, lease agreements, and income documentation are important to maintain in case the appraisal district questions the exemption.
Kyle Ellison helps Texas agricultural families understand how their land holdings interact with their overall financial strategy. Schedule a session to discuss your specific situation.
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