Taxpayers’ Rights,
Remedies & Responsibilities
(from Texas Comptroller of
Public Accounts, Publication #96-295, Jan. 2002)
Savings on Agricultural Land Taxes Agricultural appraisal lowers the value of land owned by qualified farmers and ranchers. It values rural land based on the land’s capacity to produce crops, livestock, or timber, instead of its value on the real estate market. This lower value reduces property taxes on the land. What land qualifies? Taxpayers may qualify for agricultural appraisal under two different laws. The newer law is called “open-space valuation” or “1-d-1 appraisal” (after Article 8, Section 1-d-1 of the Texas Constitution). Nearly all land that receives agricultural appraisal is under this law. Details on the older law — known as “1-d” or “agricultural use” — are available from your appraisal district.
For “1-d-1 appraisal,” the land must meet the following:
- The land must be devoted principally to agricultural use. Agricultural use includes production of crops, livestock, poultry, fish, or cover crops. It also can include leaving the land idle for 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 and cutting wood for use in fences or structures on adjacent agricultural land also qualifies. Using land for wildlife management is an agricultural use. 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. Contact your local appraisal office for details.
- Timberland must be used with the intent to produce income and be devoted principally to the production of timber.
- Both agricultural land and timberland 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 and/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.
- If your land qualified for agricultural appraisal and you change its use to a non-agricultural use, you will owe a rollback tax for each of the previous five years in which your land got the lower appraisal. The rollback tax is the difference between the taxes you paid on your land’s agricultural value and the taxes you would have paid if the land had been taxed on its higher market value. In addition, 7-percent interest is charged for each year from the date that taxes would have been due.
The chief appraiser determines if a change to a non-agricultural use has been made and sends a notice of the change. If you disagree, you may file a protest with the
ARB. You must file the protest within 30 days of the date the notice was mailed to you. The ARB decides your case.
If you don’t protest or if the ARB decides against you, you owe the rollback tax. The owner who changes the land’s use gets the rollback tax bill.
How
to File for Agricultural Appraisal
- Get an application form (Form
50-129 or 1-d-1) at your
local appraisal district office.
- Fill out the form completely
and return it to the appraisal district office after January 1, but no later
than April 30. Remember, making false statements on your application is a
criminal offense.
- If your property is valued by
more than one appraisal district, you must file an application in each appraisal
district office. If you don’t, you could end up paying taxes on your
property’s full market value to one or more taxing units. This occurs when
your property is located in a taxing unit that is also in a neighboring county.
Contact the appraisal district if you aren’t sure.
- If you need more time to
complete your application form, submit a written request to the chief appraiser
before the April 30 deadline. The chief appraiser can grant up to 60 extra days
if you have a good reason for needing extra time.
- If you miss the April 30
deadline, you may file an application any time before the appraisal review board
(ARB) approves the appraisal records (usually about July 20). However, in such a
case, you will be charged a penalty for filing late. The penalty is 10
percent of the tax saving you obtained by getting agricultural appraisal
for your land. Once the ARB approves the records, you can’t apply for
agricultural appraisal for that year.
- If the chief appraiser asks you
for more information, you will have at least 30 days to reply. You may ask for
more time but you must have a good reason. If you don’t reply, the chief
appraiser must deny your application.
- If the chief appraiser denies
or modifies your agricultural appraisal, he or she must tell you in writing
within five days. This notice must explain how you can protest before the ARB.
- Once you receive agricultural
appraisal, you don’t have to apply again in the following years unless your
qualifications change. However, the chief appraiser may request a new
application to verify that you still meet the qualifications. If you get a
notice to reapply, be sure to do so. If you don’t, you will lose your
eligibility. If you become the owner of land that is already qualified, you must
reapply in your own name by April 30. If you don’t, you will lose your
eligibility. You must notify the appraisal district in writing by April 30 if
your land’s eligibility changes. Failure to do so results in a penalty charge.
- The agricultural appraisal is
based on an estimate of the typical annual income during the five-year period
preceding the year before the appraisal. The agricultural appraisal may change
annually based on this income and the capitalization rate.
|
Previous
Next
|
