As a landowner, how can you best work with your Central Appraisal District or CAD to assess your land at agricultural value or ag value? Attorney Philip Hundl talks about obtaining and retaining an ag value assessment for property taxation during an Agriculture Law presentation at the Brazoria County Extension Office.
Summary of the Agricultural Value Assessment Video
– All right. I’m going to touch briefly on our favorite topic. These are the people we like to talk to the most, right? Central Appraisal District tax folks. We’re talking about agricultural land — land that is being assessed on the ag value or open space value instead of the market value.
You can jump on the Brazoria County website to find out what the requirements are for ag value. You’ll see these are the requirements. They’re a little bit different for each county. You go to Fort Bend, you’ve got to have at least five acres, and then, if you’re going to have cattle, you’ve got to have so many head of cows, or calves, or you name it. So, it’s these ag use stocking requirements.
If you’ve got bees, how much? We ran into this this year with my dad. He’s got pecan trees, and they wanted to say, oh, well, it’s just a stand of pecan trees. It’s not really an agricultural operation of pecan trees. And we had to show them, it’s got irrigation, and you name it. So pay lots of attention to this.
And then, don’t miss deadlines. So, there’s certain deadlines for getting the ag exemption. The filing period is January 1 to April 30th. You try to do it before January 1, and they’re not going to accept it. And then you may have submitted it too early. So, make sure it’s between January 1 and April 30th.
Be careful if you’re making transfers of land. A lot of times, folks are doing estate planning, and you may be transferring it out of your individual name, husband and wife, or whatever, into a trust. My perspective of the way the CAD operates is, when in doubt, we’re going to take it out of ag value. When in doubt, we’re going to put the market value on it. That’s what I see. I don’t want to say it’s a strategy so they can collect more taxes, but it’s just what I see.
I’ve seen a property once foreclosed on, clearly ag value, row crop, foreclosed on, and they took it out of ag. So, no change in ag, no nothing. So, be real careful about transfers, be proactive.
I’ve got a client, and the client’s got lots of tracts of land. We just want to make sure somehow they don’t take one out of ag. The chief appraiser said, “Look, in January, send me a letter, send me all the R numbers, all the account numbers, and say, ‘Please confirm that all these tracts are still going to be valued as ag production, or ag use.'”
So, be proactive. I know it may sound a little overkill, but I don’t think so, so. So, Brazoria County, the ag exemption. So, we’ve handed those out. I find them interesting, honest, because each county’s slightly different. The spacing. Go ahead Karson, point out some of the things that jumped out at you, on just the spacing. I know the ag unit, or animal units, things like that.
Some Brazoria County Requirements for Ag Exemption
– [Karson] So, like Philip said, a lot of the minimum standards pretty much change from county to county. So, here in Brazoria County, these numbers up there are specific to Brazoria County, just like the ones on y’all’s sheets. So, here in Brazoria County, if you have an improved pasture, so, not a native pasture, in order to meet your ag exemption requirements, you have to have at least three animals units. Essentially, what that means is, one animal unit’s equivalent to about a thousand-pound cow with a calf. And so, you have to at least have 3,000 pounds, essentially of animal, to meet your ag exemption requirement. Brazoria County, they have, kind of like, these general guidelines, in the sense that they say it’s about one animal unit per three acres. So, you would times the three animal units times the three acres. You roughly need about nine acres, give or take some, if you’re using livestock to get that ag value exemption.
Then those standards on y’all’s sheets, they kind of go into things like turf grass. For turf grass in particular, they have to pretty much be in parallel with commercial operations. So, even if it’s really small, you still kind of have to mimic the same gestures. And what that essentially means is, the second bullet, is that these smaller tracts just can’t have really improper equipment or no management, because then, you could just see that maybe the property’s trying to milk the system. The state just wants to make sure, or Brazoria County wants to just make sure, that nobody’s taking advantage of it to obtain ag value. So, for these turf grass farms, you essentially just have to have operating equipment with some sort of management.
Second thing is hay production. Hay production’s actually probably one of the more difficult ones to get that we have found, and the reason being is that, you have to be able to document that you made 3,000 pounds of dry foraged per cutting acre per year. A lot of people don’t have this written down. So, for hay production, it is one of the harder ones to meet, from the county’s perspective.
And then also, too, the last one is bee production, and one of the more interesting ones. Oddly enough, here in Brazoria County, if you’re running a bee production, you have to have a minimum of five acres, and then a max of 20. You cannot have more than 20. For the first five acres, six colonies are required. And you actually do have to harvest these bees, or, harvest the honey of the bees. And then, for each two-and-a-half acres over, it’s just one more colony that you have to have.
– Anybody in here has bees?
– [Man] Me.
– Okay. So–
– [Man] We got a little… When you go up to the appraisal district here, they’ve done a . They’ve raised it, or done something, and I think you got to have to have 11 acres to over-qualify for an ag exemption.
– Mm-hmm. And if you look on… And we got this straight from a website. We printed some stuff out, from the website, I mean. So, yeah, you look on there. Anyway, it’s on there. You multiply three units times the three acres, and that’s nine. And so, there’s some other calculations, I think on–
– [Man] Well, maybe they —
– Hay production or pasture.
– [Man] The rule was set last year.
– [Karson] A native–
– [Different Man] told me nine.
– There you go.
– [Karson] A native pasture is different. That’s one’s 15. Because the county says that for one animal unit of native pasture not approved–
– [Karson] You have to–
– Oh .
– [Karson] It’s one fifth.
– All right. And we’re told that you all are having a class on taxes, so we’re going to move on .
– [Woman] Yeah, we’re going to have an entire class on taxes, you guys. So, go ahead and save all your questions for then.
– I knew this was an important–
– I knew it was an important topic, so, very good. All right, so, yeah. So, these are, yeah, the Homestead, over 65. Just make sure, if it applies, make sure you get it. I always say, when in doubt, protest, or at least file the protest. Whether you go to the ARB hearing or not, that’s up to you.
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The lawyers at Wadler, Perches, Hundl & Kerlick grew up in Southeast Texas and most are from families that own agricultural land. We represent landowners in a variety of issues associated with farming and ranching including ag valuation, condemnation, partition, fence disputes, agricultural leases and more. Call our office for an appointment at 800-929-1725 or click this link to make an appointment online.