Agricultural, Timber Land and Wildlife Management Use Special Appraisal
The Texas Constitution and Tax Code provide that certain kinds of farm land be appraised based on the land’s capacity to produce agricultural products (productivity value) instead of at market value. In many cases, this appraisal technique substantially reduces taxation of land that qualifies for agricultural appraisal.
Land owners can apply for special appraisal based on the property’s productivity value. Productivity value is based on the land's ability to produce agricultural or timber products and is usually lower than market value. Land that is used to manage wildlife may also qualify for special use appraisal.
The Comptroller’s Manual for the Appraisal of Agricultural Land explains the eligibility requirements and the appraisal procedures for agricultural land, as provided by Tax Code Chapter 23, Subchapters C and D, and is adopted by the Texas Comptroller of Public Accounts under Comptroller Rule 9.4001 as required by Tax Code Section 23.52(d).
Property owners may qualify for agricultural appraisal if land meets the following criteria.
- The land must be devoted principally to agricultural use. Agricultural use includes producing crops, livestock, poultry, fish, or cover crops. It also can include leaving the land idle while participating in a government program or for normal crop or livestock rotation. Land used for raising certain exotic animals (including exotic birds) to produce human food or other items of commercial value qualifies. Cutting wood for use in fences or structures on adjacent agricultural land also qualifies.
- Using land for wildlife management is an agricultural use, if such land was previously qualified open-space land and is actively used for wildlife management. Wildlife management land must be used in at least three of seven specific ways to propagate a breeding population of wild animals for human use.
- Agricultural land must be devoted to production at a level of intensity that is common in the local area.
- The land must have been devoted to agricultural or timber production for at least five of the past seven years. However, land within the city limits must have been devoted continuously for the preceding five years, unless the land did not receive substantially equal city services as other properties in the city.
The application for special appraisal as land qualified open-space agricultural use is Form 50-129 Application for 1-d-1 (Open-Space) Agricultural Use. The application for special appraisal of land based on its capacity to produce agricultural products is Form 50-165 Application for 1-d Agricultural Appraisal. The application for special appraisal for ecological laboratories is Form 50-166 Application for Open Space Land Appraisal for Ecological Laboratories.
If land receiving an agricultural appraisal changes to a non-agricultural use, the property owner who changes the use will owe a rollback tax. The rollback tax is due for each of the previous five years in which the land got the lower appraisal. The rollback tax is the difference between the taxes paid on the land's agricultural value and the taxes paid if the land had been taxed on its higher market value. Plus, the owner pays seven percent interest for each year from the date that the taxes would have been due. For example, the fifth year of rollback tax bill may include as much as 35 percent interest, depending on the date the use changed.
Exceptions to the rollback tax for change of use may include the following if they meet certain criteria:
- a sale for right-of-way;
- a condemnation;
- land transferred to a state or political subdivision to be used for a public purpose;
- land transferred from a state or political subdivision to an individual or entity for purposes of economic development;
- timber land;
- religious organizations;
- certain charitable organizations; and
Productivity value for timber land is based on land's ability to produce timber products (productivity value) and is usually lower than market value. The Comptroller’s Manual for the Appraisal of Timberland discusses the eligibility requirements for timber land to qualify for productivity appraisal and the methodology for appraising qualified timberland, and is adopted by the Texas Comptroller of Public Accounts under Comptroller Rule 9.4011 as required by Tax Code Section 23.73(b).
The application for special appraisal as qualified timber land is Form 50-167 Application for 1-d-1 (Open-Space) Timber Land Appraisal. The application for special appraisal as restricted use timber land is Form 50-281 Application for Restricted-Use Timber Land Appraisal .
The Comptroller’s Guidelines for Qualification of Agricultural Land in Wildlife Management Use discuss the requirements that land must meet to qualify for wildlife management use to permit special agricultural appraisal, as provided by Tax Code Section 23.521, and are adopted by the Texas Comptroller of Public Accounts under Comptroller Rules 9.2001-9.2005.
Wildlife Management Planning Guidelines and Forms, including the required management plan, and other useful information are available from the Texas Parks and Wildlife Department.