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Ag Exempt?

Often we are asked about “Ag Exempt” status of a property. In Texas, agricultural tax exemptions provide a break at tax time. These exemptions are for those who live on property that is used for agricultural purposes. For land to be qualified for Ag Exempt status, it must pass four tests. These four are the time period test, current use test, primary use test and intensity of use test.

Time Period Test:

The land must have been used for agricultural purposes for five of the seven years prior to the application.

Current Use Test:

The land must be in agricultural use as of the first day of January of the tax year.

Primary Use Test:

Land must be devoted principally to an agricultural use. If the land is used for more than one purpose, the most important or primary use must be agriculture.

Intensity of Use Test:

 The degree of intensity test measures whether the land is being farmed or ranched to the extent typical for agricultural operations. This test is intended to exclude land on which token agricultural uses occur in an effort to obtain tax relief.

There are several types of agricultural operations that qualify including livestock operations, equine breeding operations, exotic animal operations, beekeeping operations, wildlife management operations, farming operations, orchard and vineyard operations, and participation in governmental programs.

Each of these categories have qualifiers, such as a minimum amount of livestock animals for livestock operations. Orchards and vineyards must produce nuts or fruits (such as pecans, peaches, and grapes) which are sold commercially. The size of the tract of land is also a qualifier, and varies with the type of operation being claimed.

If you would like to learn more about Gillespie County’s specific rules for Ag Exempt status of land, you can read a detailed article here: Gillespie County Agricultural Use Standards and Guidelines