This is one of the most asked questions! At one time nearly all “Open Space” property in Texas had an Ag Valuation. Note: the proper term is Valuation, not Exemption! With an Ag Valuation, the land will be valued for the productivity value. If it can support three cows, and a cow is worth $2000, then it will be valued at $6000 and you will be taxed as though it is worth $6000, not whatever the market value is.
Probably the first step then is to do a quick financial analysis of your tax savings with an Ag Valuation. Take into account it will likely take five years, and in that time your market valuation and tax rates will likely rise significantly. If you are paying $10,000 a year now in property taxes, they are going to go up!
In order to get an Ag Valuation, you must show five of seven years of Agricultural use. This is often cattle or other livestock, or some sort of crop – hay for example.
If you have no history and have to start from scratch, the law is VERY clear – you must use a traditional method or beekeeping to establish your five years. You CANNOT do wildlife management!
People often ask me what’s the easiest way to get an Ag Valuation. It depends. If your ranch is fenced in, the easiest way may be to sign a lease agreement with a neighbor and let their cows graze on your property. That’s usually the best option. Then you don’t have to worry about vet bills and a whole slew of issues.
For properties between 5 and 20 acres, the best option might be beekeeping. Often that means 5- 6 hives for the first 5 acres and an additional hive for every 1.5-2.5 acres. Check with your County Appraisal District to see their exact requirements. Note: you must have 5 acres of open space minimum. If you have a house, deduct an acre from the total acreage.
If neither of these options is practical, and I can understand why, go back to your financial analysis. You can hire someone to manage the bees. You can build fences to run cattle. You can find someone to harvest hay. These all come at a cost though, and you will have to determine if it meets your financial motives.
Please note: These are observations and practical advice but not complete. Please do consult with your CAD office to make sure your activities meet their requirements for an Ag valuation. Having three peach trees or one pet longhorn isn’t going to cut it!
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