While I'm not an accountant, I do know home owners, and one of the things home owners do not like to do is pay high taxes. So I thought I would talk to you about a common question I get as a real estate agent about property taxes when buying a ranch in the Austin, Texas, area. According to an article in the Wall Street Journal, here is why you want cattle on your ranch.
Tax Bill Was Reduced From $319,417 to $714
Under the Texas property tax laws, having cattle on your ranch can qualify your property for an agricultural exemption. An agricultural exemption can save you a lot of money in taxes. For instance, one land owner receives an agricultural exemption for raising cattle on a 340-acre ranch, and his county property tax bill was reduced from $319,417 to $714. That's a considerable sized reduction!
The Texas agricultural exemption's original intent was to benefit full-time farmers and ranchers. Now to qualify for an agricultural exemption, landowners need to show that their ranch is being used wholly or in part for raising livestock, growing crops, or preserving wildlife. There are several categories of animals and crops that are allowed as exemptions, including cattle and hay. Vegetation that allows indigenous birds to escape cover from enemies also qualifies as an exemption. Another agricultural exemption is beekeeping.
Annual Real Estate Taxes On 54 Acres Cut From $21,080 to $135
According to public records at the Travis County Central Appraisal District in Austin, one land owner cut annual real estate taxes on 54 acres from $21,080 to $135 by implementing a wildlife plan hanging 10 birdhouses for wrens, bluebirds, chickadees, and titmice. Another land owner cut property taxes on part of its land from $48,292 to $288 by leasing the land to a rancher who grazes cattle on its property.
Property Taxes On 185 Acres Cut From $580,780 to $1,355
Here's another example of savings through an agricultural tax exemption. A land owner that has 65 undeveloped acres of commercial land in Austin where it grows crops pays only $250 a year in property taxes. According to a wildlife plan filed in Travis County, a land owner cut property taxes on 185 acres from $580,780 to $1,355 by spraying for ants, stocking 11 turkey feeders, filling six water stations, and keeping 100 birdhouses for bluebirds. The land owner also conducts white-tailed deer habitat control through family and guests hunting.
As you can see from these examples, having an agricultural exemption on your ranch is a great advantage. If you need help finding a ranch with an agricultural exemption, feel free to call me at 512-917-0163.