Does Your Property Qualify for Agricultural Appraisal?

If you are looking to buy a “horse property” in Texas, or if you are starting an equine operation on your land in Texas, the following information may be helpful for you to determine whether or not you may successfully apply for agricultural appraisal or maintain your current agricultural appraisal status. 

Agricultural appraisal values land based on its capacity to produce crops, livestock, qualified wildlife or timber, rather than its value on the real estate market. This method typically reduces your property tax bill.

Generally speaking, land will qualify for agricultural appraisal if the land is “currently devoted principally to agricultural use to the degree of intensity generally accepted in the area.” Texas Property Tax Code, Section 23.51.

Land used primarily to raise or keep horses qualifies for agricultural appraisal. Land used primarily to train, show, or race horses, to ride horses for recreation, or to keep or use horses in some other manner that is not strictly incidental to breeding or raising horses does not qualify. Similarly, land used as a stable, where horses are kept, fed and cared for, is not being used primarily for an agricultural purpose, unless the stable is incidental to breeding and raising horses."  Agricultural Appraisal Manual at 8. 

In essence, if your primary use is breeding horses, you should not have a problem qualifying your land for agricultural appraisal. If you run a stable or training facility, you might be able to qualify your land for agricultural appraisal based on another agricultural use, such as raising hay. 

Other items of interest found in the Agricultural Appraisal Manual:

  • If your land has qualified for agricultural appraisal and your county appraisal district finds that you changed its use to a non-agricultural purpose, you will owe a “rollback” tax for each of the previous five years in which your land received the lower appraisal.
  • Agricultural appraisal applies to the land and not to other property that may be connected with the land. Barns, sheds, and other farm out-buildings must be appraised separately at market value. However, fences are treated as appurtenances and are not appraised separately. Land beneath farm buildings and other agricultural improvements does qualify because it is used in connection with the agricultural operation. 
  • Land is ineligible for agricultural appraisal if it is owned by a nonresident alien or foreigner, or if it is located within the boundaries of a city or town, unless the town has used it for a similar purpose, or if it is underserved by utilities. 

Instructions for how to apply for agricultural appraisal in Texas can be found here.

More information about the Agricultural Appraisal Manual and other property tax publications can be found here

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