Understanding Ag Exemptions

Just because the property was deemed ag exempt before you purchased it, doesn’t mean the designation automatically carries over. There are things you need to know to make an informed decision.

A little background:

  • The term Agricultural Exemption is commonly known as “Ag Exemption,”
  • It’s not really an exemption at all.
  • It’s a common term used to explain the Central Appraisal District’s (CAD) appraised value of the land based on its productivity.
  • Each Texas county has its own standards.
  • Ag exemptions can provide substantial tax savings for property owners.
  • Rules and regulations associated with the designation can be complicated to navigate.

All purchasers, including non-Texas residents, must have a valid agricultural and timber registration number (ag/timber number) issued by the Comptroller to claim exemption from Texas tax. If you do not have a valid ag/timber number, you must pay tax to retailers on your purchases.

Dripping Springs Elite Real Estate Agents have vast experience dealing with many of the following qualifying factors:

  • Farming or ranching for the purpose of raising agricultural products for sale
  • Timber production (including contract logging)
  • Feedlot operation
  • Commercial fish farm operations
  • Bee keeping
  • Custom harvesting
  • Crop dusting
  • Growing plants for sale in a commercial nursery
  • A veterinary business that makes farm or ranch calls
  • Teaching an agricultural vocational course

If you’re considering whether to buy or sell an ag exempt property, working with a knowledgeable broker who understands the process is critical. Give us a call or email us to learn more. We are happy to talk exemptions with you.