The most popular question we get in the office is related to agriculture exemptions on property. A lot of producers have the assumption that the extension office approves exemptions, but that is not the case. Our office can provide guidance on agriculture production related to a specific property, but we are not involved in the approval process. The Denton County Central Appraisal District takes applications and approves them.
Ag exemptions are well known under that name, but the label on the property is actually “1-D-1 appraisal.” The agricultural production on the property lowers the amount that is paid each year in property taxes. In Denton County, the land must fall under certain criteria (per CAD website, abbreviated below):
The land must be devoted principally to agriculture use.
The land must be devoted to production at a level of intensity that is common for the prudent managers in the local area.
The land must have been devoted to agricultural production for at least five of the past seven years. Five of five years if within a city’s limits.
There are a few things to talk about here. The level of intensity of the property must be met for land to qualify. This basically means you cannot have a 200-acre ranch with one cow on it. This gets more complicated in small tracts, but the idea is to have enough animals on the property to justify agriculture production.
Production is another key word. A property cannot have 10 cows on it that never produce any offspring. They are not producing a commodity. If the cows get bred each year, and the landowner sells the offspring, they are producing something.
Another area of emphasis is that land must be devoted to agricultural production for five out of seven years. This is really important if you are purchasing a property and are curious about an ag exemption. Try to get records from the previous landowner or reach out to the CAD to make sure your ag exemption will transfer.
If you are purchasing a property that never had an exemption on it, you have to have that land in production for at least five years before you can get an exemption on the property. A lot of you right now might be thinking, there is no way I am going to start raising cows, or baling hay or whatever practice you have in mind.
There is some good news on that front; you can lease the property to someone who is already involved in agriculture. The guidelines say that “the land” must be devoted to agriculture. It does not say that you, the landowner, must be. If you would like to be an agriculture producer like I am, by all means get after it, but I’m letting you know there are other options.
You must apply for ag use between Jan. 1 and April 30 of the current year; there are forms on the CAD website. They do have a late filing period listed that comes with a fee, but you would have to check with them to see when that date is. It varies by when their appraisal review board meets.
Denton County is a good county in which to pursue an ag exemption. There is no minimum acreage except for beekeeping practices. In one of my previous counties, you had to have 14.5 acres to qualify. Another helpful guideline in this county is horse production. In many counties, this is not included.
With that being said, there are some sticking points — horse production must, again, mean producing something. If you have geldings out eating grass, that doesn’t count. You must have females that produce offspring to be sold.
The same qualifiers apply to facilities. A horse racetrack would not count as an agriculture production, but a barn with stalls for foaling, and small pens for breeding, would count.
Ag production is a necessary practice for society to feed everyone. It is hard work, and not everyone wants to do it — that’s why the benefit of exemptions are given. It can be a great way to teach a family about the production process, or just help a landowner get out of the office and get active.
If you are curious about guidelines or the application, you can find it under “exemptions” on the CAD website. While you’re filling it out and trying to decide what you want to do, feel free to call my office, and we can review your options.