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Agricultural Valuation
What Land Qualifies?

Taxpayers may qualify for agricultural productivity valuation under two different laws. The new law is called "open-space valuation" or "1-d-1 appraisal" (Article VIII, Section 1-d-1 of the Texas Constitution). Both individual and corporate owners are eligible under this provision if the land is used for a qualified purpose. Nearly all land that receives productivity valuation is under this law.

An older law – known as "1-d" or "agricultural use" appraisal – is available only to individual owners who derive the majority of their income from farming or ranching.

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. Land which has been receiving agricultural productivity valuation may qualify as wildlife management land provided it is used in at least three of seven specific ways to propagate or maintain a population of indigenous wild animals for human use. Rules related to wildlife use may be obtained from MCAD by calling (936)-756-3354.
  • Agricultural land must be devoted to production at a level of intensity that is common in the local area. The chief appraiser, with input from an agricultural advisory board composed of local agricultural and timber producers, determines the level or degree of intensity applicable to each type of agricultural use.
  • The land must have been devoted to agricultural production for at least five of the past seven years. However, land located inside the corporate limits of a city or town is generally not eligible for agricultural valuation.

If your land qualifies 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 received 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. Plus, 7-percent interest is charged for each year from the date that the 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.

The owner who changes the use of the land gets the bill for the rollback tax.

For more information see Chapter 23 of the Texas Property Tax Code.

How to File for Agricultural Appraisal
  1. Obtain an application form at the appraisal district office or print a form off this web site.
  2. 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.
  3. 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 a neighboring county. Contact the appraisal district if you aren’t sure.
  4. 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.
  5. If you miss the April 30 deadline, you may file an application any time before the appraisal review board 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 appraisal review board approves the records, you cannot be granted agricultural appraisal for that year.
  6. 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.
  7. If the chief appraiser denies or modifies your application, he or she must tell you in writing within five days. This notice must explain how you can protest.
  8. 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.
  9. The agricultural appraisal is based on an estimate of the typical annual income during the five-year period proceeding the year before the appraisal. The agricultural appraisal may change annually based on this income and the capitalization rate.

DISCLAIMER

Every effort has been made to offer the most current and correct information possible on these pages. The information included on these pages has been compiled by County staff from a variety of sources, and is subject to change without notice. The Montgomery Central Appraisal District makes no warranties or representations whatsoever regarding the quality, content, completeness, accuracy or adequacy of such information and data. The Montgomery Central Appraisal District reserves the right to make changes at any time without notice. Original records may differ from the information on these pages. Verification of information on source documents is recommended. By using this application, you assume all risks arising out of or associated with access to these pages, including but not limited to risks of damage to your computer, peripherals, software and data from any virus, software, file or other cause associated with access to this application. The Montgomery Central Appraisal District shall not be liable for any damages whatsoever arising out of any cause relating to use of this application, including but not limited to mistakes, omissions, deletions, errors, or defects in any information contained in these pages, or any failure to receive or delay in receiving information.