I've been looking for a piece of undeveloped property to purchase for recreational and investment purposes. This site has been a great resource in helping me do my due diligence.

I recently found a piece that I'm interested in. As I was checking the tax appraisal information on it I found that it was not receiving a timber exemption that the neighboring properties were receiving (first lesson: don't rely on what the listing agent has to say about the tax status) and as a result was paying about $2,500 / year more in taxes than the similar neighboring properties.

I spoke with the county appraiser to verify and see what the options were to obtain the exemption. He confirmed that there had never been an exemption application for that parcel, though the size would qualify. Here's the kicker: The application process takes 5 years and the land has to be with the owner for 7 years before it can be granted the exemption!

I figure that easily amounts to an additional $20,000 in cost of ownership in the first 7 years in excess property taxes alone, not to mention the time, effort and cost involved to apply and qualify for the exemption.

I'm curious, how much would that influence your willingness to purchase or the price you would be willing to pay considering the surrounding properties all receive the exemption?

I just called on property I was interested in yesterday. No ag exemption, 1900 year in taxes. It is possible that a real estate transaction could raise taxes even more. Its a deal breaker for me unless it was great deal.

I have never heard of a Ag exemption taking that long....But yes if you miss the application period for that year you have to wait till the next year...And yes the first couple times they will come out and look for your exemption animals...I have a 105 acres that i bought and missed the first year exemption...I had to pay 3800 in taxes that year..The next 119.......

Property must have been used for 5 of the last 7 years to get an AG property valuation (this is not an exemption, even though it is usually what people are referring to when they talk about AG exemption) . This link should answer your questions about it. If the property has been used for agriculture for 5 of last 7 years, and you can prove that, I think you should be able to get the AG valuation. I believe it also has to be under regular AG valuation (open space, cattle, timber, or crops) before you can switch to wildlife management based agriculture valuation.

http://www.window.state.tx.us/taxinfo/proptax/tx96_295/land.html

I'm in the same situation. I have a property picked out, only I am dragging.g.g.g my feet purchasing because of the high tax bill. This property is based at $30.00 / acre in R-E taxes, which to me is a deal-breaker. 60 acres sits at $1800 year, which the ag valuation would bring it down to around $200.

The property I'm looking at is being taxed at $53/acre while a very similar (in size shape and use) adjacent property is being taxed at $1.21/acre. I would much rather have his rate with the "Ag or Timber Use Value Reduction".

The tax assessor was unambiguous when he told me about the application and time requirements, of course that doesn't necessarily mean that he's right, but as it stands that property has a significant additional cost of ownership with a tax bill that's 50x what it should be.

I have to consider the affect of the high tax rate and time/effort involved before I can get it changed as reducing the purchase value of the property.