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Ag Exemption #5619992 02/25/15 07:21 PM
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Carlos B Offline OP
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I've been thinking of buying some raw land, something around 10 acres to spend some time during the weekend and set up a feeder and possibly do some hunting on the land. I'm looking somewhere around South Texas as close to Houston as possible.

One concern, among many others, is applying for the Ag exemption. How tedious and difficult is the process? What is there that I should look into and know before buying some land?

Re: Ag Exemption [Re: Carlos B] #5620011 02/25/15 07:30 PM
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if not already in Ag Ex, will take 5 yrs to get Ag Ex

each Co is different, call them, they'll let you know the min. of livestock
you need: 1 cow, 13 goats, 3 pigs etc ...

if you have good coastal you can do hay or lease to grazing (10 might be too small )

Re: Ag Exemption [Re: cabosandinh] #5620041 02/25/15 07:41 PM
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if you get it though the other advantage is being exempt on sales tax on anything related to the property. that one can be done online very easily


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Re: Ag Exemption [Re: Carlos B] #5620086 02/25/15 08:00 PM
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You need to check before buying, because as mentioned, 10 acres is too small to just cut hay in some counties.

You'll have to actually have an Ag use. One of the things I've seen done is plant an orchard, but again, each county stipulates the upkeep requirement around that.

Easier to just buy a place that already has it in place. Sometimes land is carved out of larger parcels or previous owners have gotten the exemption on a big place for grazing, hay, etc, and it's still categorized as such when it's parceled out small by the county.

Re: Ag Exemption [Re: tlk] #5620174 02/25/15 08:49 PM
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Originally Posted By: tlk
if you get it though the other advantage is being exempt on sales tax on anything related to the property. that one can be done online very easily


But that's once I have gotten the AG exemption correct?

Re: Ag Exemption [Re: cabosandinh] #5620177 02/25/15 08:51 PM
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Originally Posted By: cabosandinh
if not already in Ag Ex, will take 5 yrs to get Ag Ex

each Co is different, call them, they'll let you know the min. of livestock
you need: 1 cow, 13 goats, 3 pigs etc ...

if you have good coastal you can do hay or lease to grazing (10 might be too small )


Definitely did not know that.

I really want a piece of land, worst comes to worst, I'll pay the property taxes but first I need to do how much that is. I already own a home, so I'm not in a position where I can pay for another property's taxes if they run in the thousands like my current home.

Thanks everyone for your feedback.

Re: Ag Exemption [Re: Carlos B] #5620198 02/25/15 09:00 PM
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Originally Posted By: Carlos B


Definitely did not know that.

I really want a piece of land, worst comes to worst, I'll pay the property taxes but first I need to do how much that is. I already own a home, so I'm not in a position where I can pay for another property's taxes if they run in the thousands like my current home.

Thanks everyone for your feedback.


outside of Houston, just use a 2% Tax as a base

Assuming:
$3000/ac x 10 = $30,000; 2% tax = $600

Re: Ag Exemption [Re: cabosandinh] #5620286 02/25/15 09:39 PM
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Originally Posted By: cabosandinh
Originally Posted By: Carlos B


Definitely did not know that.

I really want a piece of land, worst comes to worst, I'll pay the property taxes but first I need to do how much that is. I already own a home, so I'm not in a position where I can pay for another property's taxes if they run in the thousands like my current home.

Thanks everyone for your feedback.


outside of Houston, just use a 2% Tax as a base

Assuming:
$3000/ac x 10 = $30,000; 2% tax = $600



It came out close to what I got using the County's tax rates. But your formula was way easier.
nidea

Re: Ag Exemption [Re: Carlos B] #5620455 02/25/15 10:49 PM
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If the property does not have 5 yrs of AG taxes then you will have to spend 5 yrs of having AG income to get it. If it has 5 yrs of AG taxes then you might be able to change to Wildlife. It will really depend on the county you buy in and how the set their guidelines. I had a buddy who owned 22 acres northwest of Houston who had a place that had ag exmeption....the county made him run 10 cows just to keep the exemption. He usually had to feed the cattle in dry times and it got expensive for him. Still had the cheaper taxes and cattle income but it was costly out of pocket for the return he got. 10 acres in South Texas will not be that great of hunting if every place is that small around you. Finding 10 acres for that price close to Houston will be next to impossible.


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Re: Ag Exemption [Re: stxranchman] #5620472 02/25/15 10:59 PM
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I bought 44 acres of raw land for investment purposes but leased the grass to a guy running a few cows and horses on it. I have held the property 7 years and began selling off parcels of it - I have 12 acres left. Saved me a fortune in taxes. But when it sells if the buyers changes use they have to pay rollback taxes on it.

And yes it varies from county to county


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Re: Ag Exemption [Re: Carlos B] #5620563 02/25/15 11:43 PM
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Around here the stocking rate for cattle is around 30 acres per cow. In my way of thinking you are SOL unless it was originally AG. and then you lease it to who ever the original user was and do not fence it unless there is water on it. The market value on taxes are not going to break you on 10 acres.

Re: Ag Exemption [Re: Carlos B] #5620615 02/26/15 12:14 AM
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As others have said, the rules are different in each county. Sometimes they have them posted on the county website. One of the easiest ways to get an ag exemption is to use it to grow timber. You may want to plant it, or if it's wooded, you may not have to do anything, just say you're letting it grow timber naturally.

Most counties have a website where you can search for the property and find out exactly what the current owner is paying in taxes. As others have said, just ask the county before you pay a bunch.

In my county you have to have at least 10 acres to qualify for an ag exemption.

Last edited by Humblesmith; 02/26/15 12:15 AM.

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Re: Ag Exemption [Re: don k] #5620757 02/26/15 01:13 AM
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Originally Posted By: don k
Around here the stocking rate for cattle is around 30 acres per cow. In my way of thinking you are SOL unless it was originally AG. and then you lease it to who ever the original user was and do not fence it unless there is water on it. The market value on taxes are not going to break you on 10 acres.


The MV where I live will kill you on 10 acres if it is in the right place


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Re: Ag Exemption [Re: Carlos B] #5621516 02/26/15 02:50 PM
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One problem you may have is that to be AG or Wildlife exempt, you have to have 10 acres, in my county. BUT, if you have a house on the property or any permanent living structure, the state will deduct (1) acre of land for that structure, so be sure that if you buy something, and ever want to put a house, etc on it, that you have at least 10 acres left.
In a nut shell, ONLY buy a piece of land that is already AG exempt, PERIOD! Or you are going to have to as, stxranchman, said, have to wait for 5 years before you can apply, and that means you are paying higher taxes for those 5 years. And to apply for wildlife exemption, where you don't have to run any cattle or raise any hay, you first have to be AG exempt.


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Re: Ag Exemption [Re: Mr. T.] #5621597 02/26/15 03:37 PM
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Originally Posted By: Mr. T.
One problem you may have is that to be AG or Wildlife exempt, you have to have 10 acres, in my county. BUT, if you have a house on the property or any permanent living structure, the state will deduct (1) acre of land for that structure, so be sure that if you buy something, and ever want to put a house, etc on it, that you have at least 10 acres left.
In a nut shell, ONLY buy a piece of land that is already AG exempt, PERIOD! Or you are going to have to as, stxranchman, said, have to wait for 5 years before you can apply, and that means you are paying higher taxes for those 5 years. And to apply for wildlife exemption, where you don't have to run any cattle or raise any hay, you first have to be AG exempt.


Yeah, the whole waiting five years to get approved for AG exemption is a deal breaker for me. I estimated about $1900 property taxes, so that's not too bad.

Re: Ag Exemption [Re: Carlos B] #5621601 02/26/15 03:38 PM
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Here's what I found on the county I'm interested in:

Only the acreage actually used agriculturally may qualify for ag-use 1-d-1.

Small acreage with a home built upon the tract is primarily residential in nature, with ag-use secondary. Open space land must have ag-use as its primary use in order to qualify for ag-use. Therefore will not qualify, but may all be homesteaded.

If the County is declared an agricultural disaster area, a pasture may lay out of agricultural production due to drought and excessive heat and keep the ag qualification. However if a pasture lays out of production for longer than one (1) year the land may lose its ag qualification.

Tracts of land that do not meet the minimum acreage may qualify if used with a larger operation that meets or exceeds the qualifications as a whole.To be considered part of a larger operation, the primary operation must be within a reasonable distance of the smaller tract for a prudent operator to justify the travel and expense and be worked by the same operator with written documentation of the lease agreement. Documentation of cuttings, planting, harvesting or other proof will be required for the tract that does not meet the minimum requirements

Small tracts in the city limits that would otherwise meet all the qualifications, except for being in the city limits, will be grandfathered in. If the tracts continues to be used as described above with a larger operation, it may retain the ag appraisal until it is sold. It must meet the minimum size and usage standards. No new ag applications for lots in the city limits will be granted.


Animal Units
1 Cow = 1 A.U.
Cow & Calf = 1 A.U.
Horse = 1 A.U.
Bull = 1 1/2 A.U.
2 – 500 Pound Calves = 1 A.U.
2 Colts = 1 A.U.
6 Goats & Sheep = 1 A.U.
2 Miniature Horses = 1 A.U
2 Miniature Donkeys = 1 A.U.


Stocking Rate
Good – 1 animal unit per 1-3 acres
Average – 1 animal unit per 4-8 acres
Poor – 1 animal unit per 8-15 acres


Cattle
Six Acre Minimum – 5 Animal Unit Minimum
Degree of Intensity (Stocking Ratios)
1 Animal Unit = 1 Cow
1 Animal Unit = 1 Cow/Calf
1 1/2 Animal Unit = 1 Bull
1 Animal Unit = 2 500 Pound Calves

Pastures with 6 - 15 acres must have 5 animal units.
Above 15 acres the normal stocking rate is applicable.
Cow/Calf - This operation is in the business of raising beef for sale to either processors or to other operators for breeding stock.
Feeder/Stock - This operation is in the business of raising beef for processors. Must be on feed for 150 days and the intensity would double.

Management practices:
Fences Maintained
Fertilize
Stock Water
Marketing
Weed Control


Sheep - Goats
Six Acre Minimum – 5 Animal Unit Minimum (30 head)
Degree of intensity (stocking ratios)
1 animal unit = 6 goats &/or sheep
This operation is in the business of providing two by-products wool/mohair & meat.

Management practices:
Fences maintained
Stock water
Market (wool/mohair &/or meat)

Horses
Six Acre Minimum – 3 Animal Unit Minimum
Degree of intensity (stocking ratios)
1 animal unit = 1 mare
1 animal unit = 1 mare & foal
1 animal unit = 1 stallion
1 animal unit = 2 miniature horses

This operation is directed to breeding operations. By-products are colt & fillies. This operation involves having brood mares. Usually includes special facilities & pasture is normally coastal.
Management practices:
Fences maintained
Stock water
Marketing
Breeding Records

Hay Meadow
Five Acre Minimum
Degree of intensity
4 round/100 square bales per acre per year. (4000 lbs per acre)
Minimum two cuttings per year.
This operation involves the cultivation of planted or maintained grasses.
Proof of baling receipts, proof of sales, proof of ownership of cattle may be required.
Management practices:
Fertilize
Apply herbicide
Cut/bale
Limited grazing
Market or used for personal livestock feed.
PROPERTY CUT OCCASIONALLY TO CLEAR THE GRASS/WEEDS WILL NOT QUALIFY FOR AG-USE.

Cropland/Turf
Ten Acre Minimum
This operation involves the cultivation of the soil for planting grain crops with the intent of harvest for sale or for feed. Turf Grass must be a wholesale operation.

Management practices:
Shredding previous crop
Planting
Apply herbicide
Harvest
Tillage
Fertilize
Insect control

Orchard/Vineyard
Five Acre Minimum Degree of intensity
Pecan/Fruit Trees – 15 trees per acre
Vineyard - 100 per acre
This operation is in the business of cultivating & growing of trees or grapevines that produces crops of nuts & fruit.

Management practices and documentation:
Weed control
Insect control
Fertilizer
Pruning
Supplemental water
Harvesting

Exotics
Six Acre Minimum
Deer – Minimum of 12 adult head for pastures of less than 15 acres. Above 15 acres regular stocking rates apply.
Ostrich/Emus – 50 adult head & only the fenced area may qualify for ag-use.

This operation is in the business of raising breeds that are not native to Texas for supplying meat and/or leather for the specialty markets.

Management practices:
Seven to eight foot perimeter fence
Market for meat and or leather
Maintain harvesting schedule

Re: Ag Exemption [Re: Carlos B] #5621751 02/26/15 04:54 PM
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What county is that?

Re: Ag Exemption [Re: don k] #5621803 02/26/15 05:19 PM
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Wharton County

Re: Ag Exemption [Re: Carlos B] #5622016 02/26/15 07:07 PM
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Without ag exempt my taxes would have been $3,350 per year on 54 acres. With wildlife exempt they are $58 per year. So, you do the math on how important being exempt can be on enjoying your own piece of land.


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Re: Ag Exemption [Re: Mr. T.] #5622463 02/26/15 10:35 PM
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Originally Posted By: Mr. T.
Without ag exempt my taxes would have been $3,350 per year on 54 acres. With wildlife exempt they are $58 per year. So, you do the math on how important being exempt can be on enjoying your own piece of land.


That is very true, but I'm only looking to buy 10 acres, so I don't know if I'll be spending the same amount of money and my time to pay lower taxes but I'd spend the same or more trying to get the exemption.

Re: Ag Exemption [Re: Carlos B] #5622938 02/27/15 02:45 AM
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Not sure if this helps, but here goes:
Recently, BEEKEEPING has been allowed to earn Ag exemptions.
So, you don't want to mess with bees? Turns out, you don't have to, and it can be profitable for you.
Beekeepers will actually pay you to place their hives on your property. This can allow their bees access to desirable nectar flows in your area. You may get paid in honey. You may get paid nothing. Some growers (think California almonds) actually pay the beekeepers to locate large amounts of hives in their orchards to achieve maximum pollination. Most counties have beekeeping groups which may serve as a conduit to connect landowners with beekeepers.
Everyone always asks me about safety in beekeeping. On a 10 acre parcel, you would not know that the bees are even there. I have 2 hives in my neighborhood back yard. The neighbor kids watch me 'work' my bees, and they find it fascinating. I wear only latex gloves to help my hold the frames of comb, and a screened hat just because it's hard for me to focus with bees everywhere. I don't wear a full 'space' suit or any other gear. If it's hot, I work my bees in short & t shirt. Contrary to common perception, normal honey bees are quite calm, even when I open up their home!

Re: Ag Exemption [Re: Tux Man] #5623508 02/27/15 02:20 PM
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Originally Posted By: Tux Man
Not sure if this helps, but here goes:
Recently, BEEKEEPING has been allowed to earn Ag exemptions.
So, you don't want to mess with bees? Turns out, you don't have to, and it can be profitable for you.
Beekeepers will actually pay you to place their hives on your property. This can allow their bees access to desirable nectar flows in your area. You may get paid in honey. You may get paid nothing. Some growers (think California almonds) actually pay the beekeepers to locate large amounts of hives in their orchards to achieve maximum pollination. Most counties have beekeeping groups which may serve as a conduit to connect landowners with beekeepers.
Everyone always asks me about safety in beekeeping. On a 10 acre parcel, you would not know that the bees are even there. I have 2 hives in my neighborhood back yard. The neighbor kids watch me 'work' my bees, and they find it fascinating. I wear only latex gloves to help my hold the frames of comb, and a screened hat just because it's hard for me to focus with bees everywhere. I don't wear a full 'space' suit or any other gear. If it's hot, I work my bees in short & t shirt. Contrary to common perception, normal honey bees are quite calm, even when I open up their home!


Interesting concept, may have a look at it. I didn't see anything on the county's website so I may have to call and ask. Then on my hunt to search beekeepers bolt

EDIT: It looks like if I can lease to beekeepers and they bring around 6 or 7 beehives, I could qualify for the AG exemption after 5 years. INTERESTING cheers

Beekeeping is an agricultural use and shall qualify for agricultural use productivity valuation if used for pollination or production of human food (Sec 23.51.2, TX Prop Tax Code, amended 2014)

ACEAGE: State Law has set a minimum of 5 acres and maximum of 20 acres to qualify beekeeping as an ag use.

DEGREE OF INTENSITY: Standard is set at a minimum of 6 colonies and 5 acres. This is based on Section 131.001 Texas AG Code definition of an apiary, which is a place where 6 or more colonies or nuclei of bees are kept.

A colony is the hive and its equipment and appurtenances including bees, comb, honey, pollen and brood.

FOR EACH ADDITIONAL 2.5 acres one (1) additional hive is required.
5 - 7.4 = 6 hives 7.5 - 10 = 7 hives and etc... Maximum of 20 acres = 12 hives

To consider Beekeeping historical information, you must provide export, import or intra-state permits, which are required by the Texas Apiary Inspection Service to transport hives.

Hives must be maintained and kept alive, and on site at least seven (7) months of the year. If natural environment is not present, floral must be planted.

Info: Apairy Inspection Service-Texas Bee Laws
http://tais.tamu.edu

With less than 100 acres in a county, Ag use is Orchard Price, as a high intensity product.

Last edited by Carlos B; 02/27/15 02:27 PM.
Re: Ag Exemption [Re: Carlos B] #5623896 02/27/15 05:16 PM
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Does anyone know if a "Disabled" exemption can be used on primary home and on separate raw land? scratch

Re: Ag Exemption [Re: Carlos B] #5623953 02/27/15 05:50 PM
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It was my understanding horses did not meet the requirements for ag exemption, maybe your county is different.

I would suggest finding a lease.


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Re: Ag Exemption [Re: Carlos B] #5624049 02/27/15 06:47 PM
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Redchevy is right. Unless you're planning on building a home, you will probably be very disappointed on only 10 acres. Unless you're talking about a place with very high deer density, and I don't think Wharton county is going to fall into that category. There are a lot of deer in the 'coastal prairie' belt though in places. Location, location, location.


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