Published July 20, 2026

Ag Exemption

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Written by Greg Potts

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The Texas Ag Exemption: What It Is, What It Isn’t, and What It’s Worth

Almost every buyer who walks a North Texas ranch property asks about it. Almost none of them fully understand it. The Texas ag exemption isn’t actually an exemption — it’s a special valuation, and that distinction matters enormously when you’re buying, selling, or managing rural land.

A 50-acre tract near Weatherford appraised at $500,000 might carry an annual tax bill around $11,000 at market value. With ag valuation, that same tract could drop to roughly $550 per year — over $10,000 in annual savings.

The Texas ag exemption isn’t an exemption — it’s a special valuation under Section 1-d-1 of the Texas Tax Code. Your land is taxed at its agricultural productivity value, not its market value. That gap is where the savings live.

How to Qualify

  • Primary use must be agricultural: Livestock grazing, hay production, crop production, beekeeping, and wildlife management all qualify.
  • 5 of the past 7 years in ag use. The previous owner’s history counts if you continue the agricultural activity.
  • Minimum acreage. Most North Texas counties require 10–15 acres. Beekeeping can qualify on as few as 5 acres.
  • Agricultural intensity. Your operation must reflect what’s normal for the area — two cows on 50 acres won’t cut it.

The Rollback Tax — What Buyers Must Understand

If you change the land’s use — subdivide it, stop running cattle — the county recaptures the savings through rollback taxes: the difference between ag and market value taxes for the previous 5 years, plus 7% annual interest. On a valuable North Texas tract, that can easily reach five or six figures.

Rollback taxes are one of the most important due diligence items on any rural transaction. Always verify ag status and potential rollback liability before closing.

Application Deadline: April 30

File with your county appraisal district using Form 1-D-1. Once approved, the valuation continues as long as you maintain qualifying use. Keep receipts for feed, vet bills, fencing, and equipment — counties audit periodically.

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Ag Exemption
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