The goal of the 1-d-1 agricultural “exemption” appraisal method is to only tax that portion of your property being used for the specific type of agricultural method based on the income potential of that use. Article VIII, Section 1-d-1, Texas Constitution, and Chapter 23, Subchapter D, Texas Property Tax Code, provides for appraisal of open-space land.
This method is most important if you own or maintain any sort of agricultural land, be it cattle pastures or ranch, farm, grazing, or hay production land. The 1-d-1 appraisal is even allowed for raising horses in certain circumstances.
Land qualifies for special appraisal (1-d-1 appraisal) if it has been (1) used for agriculture for five of the preceding seven years and is currently devoted principally to agricultural use as defined by statute, (2) used to protect federally listed endangered species under a federal permit, or (3) used for conservation or restitution projects under certain federal and state statutes. The land must also be used for agriculture to the degree of intensity generally accepted in the area. The value of the land is based on the annual net income from a typical lease arrangement that would have been earned from the land during the five-year period preceding the year before the date of appraisal by an owner using ordinary prudence in the management of the land and the farm crops and livestock produced or supported on the land, including income received from hunting or recreational leases.
It is wise to consult a local agricultural exemption Property Tax Attorney for advice in this regard, but here are a few tips to get you started on your own.
- Document your land’s use. Even if you have not personally used your land for the required time to seek an agricultural exemption, perhaps the prior owner did and can attest to the continuous use, typically five of the last seven years. It is wise to keep all receipts documenting purchases for your use, be it fertilizer, feed, animals, equipment, or other incidental products.
- Prepare for your inspection. Be careful about when you apply because it is likely that your local agricultural appraiser will be visiting your property at any time after your application is received. If you were not prepared and did not have your animals there or had your crops planted or land prepared, you better have a good explanation or risk your application being denied.
- Use the most up-to-date forms. Be sure to use your local appraisal district’s designated forms for use. There are many different districts, and each one has its own way it likes to do business. Be clear on this, and if in doubt, call the appraiser and make sure you have the correct documents.
- Timely applications. Depending on your local appraisal district, it is likely that there are critical application and postmark dates that are necessary to meet in order for your application to even be considered. Generally speaking, you must complete the application in full and file it with the chief appraiser before May 1 of the year you are applying for agricultural appraisal. The appraiser is unlikely to grant an extension to you, so be early, and be timely. To be accepted, the form must contain information necessary to determine the validity of the claim for agricultural appraisal. If your application is approved by the reviewer, you do not need to file again in later years unless the chief appraiser requests a new application from you. The chief appraiser may disapprove the application and request additional information and will likely make a site visit to your property. The chief appraiser may deny the application and you may protest that determination to the county appraisal review board in a timely manner.
- Seek advice. Due to the likely value of your agricultural exemption appraisal, it is wise to pay a little to save a lot. Depending on the type of client and property, the experienced agricultural appraisal attorneys at The Farah Law firm can not only perform an entire application and attend hearings, but we are typically willing to review applications and offer some basic consultation on an hourly fee basis.
As a landowner himself, Property Tax attorney Michael Farah understands the needs of rural landowners and the complex situations they face which many other property tax professionals simply cannot relate to. Contact Arlington Real Estate Lawyers for all things real estate.