Is the term "Ag Exemption" the right term to use?
Why should you care if the land you are buying or own is classified as "ag exempt"?
Let me show you want an exemption is:
I am a disabled veteran, based upon my percentage of disability I am granted a value. I am rated at 30% so the value I can use, (if I apply for it with the local appraisal district) is $7500. I am able to receive a partial exemption that allows me to remove a dollar figure for my disability from the property value from taxation.
Valuation of Property in dollars - fixed dollar ($7500) = New taxable amount for valuation purposes. (E.g., $200,000 -$ 7500 = $192,500)
There are many types of "Exemptions" that are allowed under the Texas Property Tax Code.
Here is a short list:
- Residence homestead (Tax Code Section 11.13)
- Veterans' exemptions -(Tax Code Sections 11.131, 11.132, 11.22 and 11.23(a))
- Charitable organizations generally (Tax Code Section 11.18)
- Community land trusts (Tax Code Section 11.1827)
- Primarily charitable organizations (Tax Code Section 11.184)
- Religious organizations (Tax Code Section 11.20)
- Private schools (Tax Code Section 11.21)
- Public property (Tax Code Section 11.11)
Using the example above, take the disability dollar figure and deduct it from the total value of the property equals a new taxable amount. This method does NOT apply to open space land (ag land) UNLESS there is an exemption that the land is qualified to take based upon what is shown in the tax code.
The Texas Constitution permits qualified open-space land to be taxed generally at a productivity value instead of market value. The legal basis for this type of special valuation called "Ag Use Open Space" or "1-d-1"is found in the Texas Constitution, Article VIII, Section 1-d-1. The Texas Tax Code (TPTC), Sections 23.51 – 23.57 provide the core provisions for implementation.
Why is this important?
- If you are a buyer and your agent tells you that the land is ag exempt, you NEED to understand what exactly is being said and what does that mean to you? Never assume you know what is inferred by a meaning, ask your agent EXACTLY what they mean when they use the term exempt! Have them spell it out in writing so you have a written record.
- If the land does NOT have an ag valution, then you do NOT qualify to have the land appraised for wildlife management use by the local appraisal district.
I have been contacted with regularity regarding this subject by landowners that have bought land from unqualified agents . if your agent does NOT know how to determine if the land you are buying has an "ag valuation", RUN and find someone that knows OR else be aware of 'caveat emptor" !!
Looking on the local county appraisal districts website to determine ag status is only HALF of the equation.
If you are a real estate professional that sells land and you don't know what I mean by; "Looking on the local county appraisal districts website is only HALF of the equation", then you need to take my 4 hour MCE class that goes into this in great detail!!!
Contact me if you are interested in taking a class.
