Tax Relief for Texas Landowners TA K E A DVA N TAG E O F AG - U S E VA LUAT I O N S TO LOW E R YO U R R U R A L P R O P E R T Y TA X E S . STORY FARM CREDIT BANK OF TEXAS | FINDFARMCREDIT.COM
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enjamin Franklin observed that “. . . nothing can be said to be certain, except death and taxes.”
Today, that prophetic statement still applies in Texas, where property taxes are a major source of revenue for the state. Fortunately, if you own rural land in the Lone Star State, there are ways to reduce your property tax burden.
Assessing Land for Productive Value
The Texas Constitution provides special property valuation methods to help rural landowners. Instead of being taxed on its market value, your agricultural land may be taxed on its productive value. The difference can be significant. That’s because the price you pay for the land
is usually much higher than the income it generates. Ag law expert Tiffany Lashmet gives the example of a 1,200-acre northwest Texas ranch. It produced $30,000 in gross revenue from cattle and hunting leases in 2015. The tax bill would have been $45,880 based on market value. Because of open space valuation, the owner paid $1,687 in property taxes. “Without these special valuation methods, farmers often would owe more in taxes than they could generate from agricultural production,” says Lashmet, Texas A&M AgriLife Extension specialist in agricultural law.
Helping First-time Landowners Newcomers to rural Texas may not be aware of these property tax relief options— often called agricultural tax exemptions.
