Become A Landowner

It is not an exemption at all, and the distinction matters.

What people call an ag exemption is a special appraisal under Texas Tax Code Chapter 23, Subchapter D, authorized by Article VIII, Section 1-d-1 of the Texas Constitution. Your land is not exempted from tax. It is valued differently, on what it can produce agriculturally rather than what it would sell for.

The savings are large because the gap between those two numbers is large. Land worth $40,000 an acre on the open market might carry a productivity value of a few hundred dollars an acre. On real acreage that difference routinely runs into thousands of dollars a year, every year you hold it.

You will hear 1-d and 1-d-1 used interchangeably. They are not the same. 1-d is the older provision requiring agriculture be your primary occupation and income source, and almost nobody uses it. 1-d-1 open-space is what virtually every landowner in Texas actually has.

There is no statewide minimum acreage. Anyone who quotes you a single number for all of Texas is guessing.

What the law actually requires is that the land be devoted principally to agricultural use to the degree of intensity generally accepted in your area, and each county appraisal district sets that standard with an agricultural advisory board.

Documented North Texas benchmarks, by county: Dallas CAD requires a minimum of 3 animal units. Collin CAD uses 3 animal units, allowing 2 with benefit of the doubt, and counts one cow as equal to two calves, six sheep, seven goats, or one horse. Hill County, just south of Ellis, runs roughly one animal unit per 10 to 20 acres of native range. Grayson CAD cites about one animal unit per 3 acres of improved pasture, or one per 7 to 10 acres of native.

Practically, that puts most North Texas livestock and hay operations in the 10 to 15 acre range as a floor, with beekeeping opening the door at 5.

For Ellis County specifically, call the Ellis Appraisal District at (972) 937-3552 and ask for their current degree of intensity schedule. Their published corn standard is 70 bushels per acre, which tells you these standards are genuinely specific, and they are the only authority on their own numbers.

The deadline is April 30 of the tax year, and you must have owned the land as of January 1.

Miss it and you are not automatically out. Late applications are generally accepted until the Appraisal Review Board approves and certifies the appraisal records, usually mid to late July, but they carry a penalty of 10 percent of the tax savings you would have received.

File on time. The penalty is entirely avoidable and the application is not complicated.

Under Tax Code §23.51, land must have been devoted to a qualifying agricultural use for at least five of the preceding seven years to be eligible for 1-d-1 open-space valuation. Inside city limits the standard tightens to five of five.

This is the requirement that catches buyers of raw land who plan to start an ag operation. The history has to already exist on the property. Running cattle for the first time on land that has sat idle for a decade does not qualify you next April.

This is why buying land that already carries ag valuation is worth real money over an identical tract that does not. You are buying the history along with the dirt.

This is the single most expensive surprise in Texas land, and the current numbers are better than what most articles still say.

When ag-valued land is converted to a non-agricultural use, the state recaptures the tax savings. Under House Bill 1743, effective September 1, 2019, the rollback covers three years of the difference plus five percent annual interest, amending Tax Code §§23.55 and 23.76.

You will still see "five years and seven percent" published widely. That was the law before 2019 and it is wrong now. If a source tells you five years, that source has not been updated.

The rollback follows the change of use, not the sale. If you buy ag land and stop the qualifying use, that bill is yours, not the seller's. If you intend to build a subdivision or develop, price the rollback into your offer before you write it.

No, and this is one of the most expensive assumptions a land buyer makes.

The new owner must file a new application by April 30. The valuation does not ride along with the deed. Buy in June, forget to file the following spring, and you have just been assessed at full market value on land you thought was protected.

You also have to actually maintain the qualifying use at the county's required degree of intensity. Selling off the cattle and letting the pasture go for a season is how people lose it without ever intending to.

Generally yes, with an important limit.

Building a residence you occupy as your homestead does not typically trigger rollback on the whole tract. What happens instead is that the homesite portion is carved out and taxed at market value, while the remaining qualifying acreage keeps its productivity valuation.

That is why the ag calculator on this page starts from your total acreage minus roughly one acre for the homesite. The house and the ground under it are taxed at market value either way.

Where it goes wrong is scale. Converting a meaningful portion of the tract to non-agricultural use, subdividing, or building something that is not your residence can absolutely trigger rollback on the converted acreage.

It is the option most landowners have never heard of, and for a lot of smaller North Texas tracts it is the better answer.

Wildlife management valuation, 1-d-1-w under Tax Code §23.51(7) and §23.521, values your land identically to agricultural valuation. It is revenue neutral. You are not saving more or less. You are changing what you have to do to qualify.

The catch is the entry requirement. Your land must already be appraised as qualified 1-d-1 open-space ag land in the year you convert. You cannot go from market value straight to wildlife.

To qualify you must perform at least three of seven approved practices: habitat control, erosion control, predator control, supplemental water, supplemental food, supplemental shelter, and census counts. You file a management plan with Texas Parks and Wildlife on form 885-W7000.

For someone who inherited a place, is done running cattle, or wants the land managed for deer and quail rather than production, this keeps the tax treatment without the livestock. Fencing and feeders instead of a herd.

Yes, and on small acreage it is frequently the most practical path.

Texas Tax Code §23.51(2) states that agricultural use includes using land to raise or keep bees, provided the land is not less than 5 nor more than 20 acres. Bees were added as a qualifying use in 2012.

The intensity standard traces to Texas Agriculture Code §131.001: at least six colonies or nuclei for the base acreage, with most counties scaling up roughly one additional hive per 2.5 acres above five.

Note the ceiling as well as the floor. Bees qualify land between 5 and 20 acres. Above 20, you need a different qualifying use.

The five of seven year history requirement still applies. Bees are a lower-cost way to maintain qualification, not a shortcut around the history.

This is the answer that surprises people most, and it is worth understanding before you fall in love with a tract.

In Texas the mineral estate can be severed from the surface estate and owned by someone else entirely. It is common for previous owners or their heirs to have kept the minerals when they sold the surface.

The part that matters practically: the mineral estate is the dominant estate. A mineral owner or their lessee holds an implied right to use as much of the surface as is reasonably necessary to explore for, drill, and produce those minerals. Your consent is not required.

There is a meaningful limit called the accommodation doctrine. If you have an existing surface use and the operator has a reasonable alternative that would not interfere, they must accommodate you. It is a real protection but it is narrower than most landowners assume.

Ask what mineral rights convey, have the title company or a landman check for severance, and find out whether an oil and gas lease is already in place. A negotiated surface use agreement can limit where and how an operator works. That is a conversation to have before closing, not after a truck shows up.

Two different waters, two entirely different legal regimes.

Groundwater. You own the water beneath your land and may pump it under the rule of capture. Texas is the only state that never fully abandoned that doctrine. The practical limit is your local groundwater conservation district, which regulates spacing, production, and permits. Under Water Code §36.117, districts must exempt a well used solely for domestic use or for livestock and poultry on a tract larger than 10 acres that cannot produce more than 25,000 gallons a day, roughly 17 gallons per minute.

Surface water. The State of Texas owns it. Water in a watercourse is not yours because it crosses your property, and diverting it generally requires a TCEQ permit under Water Code §11.0235. Riparian owners may impound limited amounts for domestic, livestock, and wildlife use without one.

On land, water is frequently the single most important factor and the most expensive to be wrong about. Ask for the well's depth, flow rate, and a water quality report, or find out what neighboring wells cost to drill and what they yield.

Land financing is a different world with a much smaller lender pool.

Raw or unimproved land commonly requires 20 to 35 percent down, and some lenders go higher on genuinely raw parcels. Improved ranch land with a residence or income typically runs 20 to 30 percent. Conventional Fannie and Freddie financing generally does not cover raw land at all.

Where to look: Farm Credit institutions including Capital Farm Credit and Texas Farm Credit, community banks holding loans in portfolio, and USDA Farm Service Agency programs.

Texas veterans have something no other state offers. The Veterans Land Board program, which the Texas General Land Office describes as the only one of its kind in the nation, lends up to $200,000 with typically a minimum five percent down payment on tracts of one acre or more, on a 30-year term.

Talk to a lender who actually closes land deals before you shop. A residential loan officer who has never done raw land will tell you what they can do, not what is possible, and the right lender genuinely changes what you can buy.

Almost always the answer is yes, and the real questions are what kind and what it costs.

On-site sewage facilities are governed by TCEQ under 30 TAC Chapter 285. There is no flat statewide acreage minimum. What your land can support depends on soil type and percolation, determined by a site evaluation from a licensed site evaluator or professional engineer.

The 10-acre rule is what people are actually searching for. A system may be exempt from permitting if a licensed evaluator or PE evaluates it, it serves a single family dwelling on a tract of 10 acres or larger, all parts sit at least 100 feet from the property line, effluent is disposed on the property, and it is the only dwelling on the tract.

Exemption from permitting is not exemption from design standards. And roughly 40 Texas counties act as authorized agents, permitting locally with rules that can be stricter than the state's.

North Texas clay drains poorly. A failed perc test can mean an aerobic system at several times the cost of conventional, or moving your homesite entirely. Get the site evaluation during your option period, not after closing.

Two separate questions and both matter.

Can you legally get there? Texas does not guarantee access to every parcel. A tract reached only by driving across a neighbor's land needs a recorded easement. A handshake, or forty years of everybody doing it that way, is not access. Landlocked parcels are more common than buyers expect, and most lenders will not finance one.

Where no express easement exists, an easement by necessity or a prescriptive easement may be established, but that is a legal proceeding, not a closing document.

Who can cross your land? Pipelines, utility corridors, and shared roads all appear as recorded easements, and they restrict what you can build and where. A pipeline easement across the middle of a tract can eliminate your best homesite.

Ask for Schedule B of the title commitment and read it. Every recorded easement is listed there, and that page is the cheapest due diligence available to you.

There is no statewide acreage minimum for hunting in Texas. The rule you have heard is real, but it comes from a different place than most people think.

Under Local Government Code §235.042, a county commissioners court may by order prohibit or regulate hunting with bows and arrows on lots of 10 acres or smaller located in a subdivision in the unincorporated area of the county. Firearm discharge authority for those same subdivision lots sits in §235.022.

So it is a county-by-county subdivision ordinance, not a state law, and it applies to platted subdivision lots rather than all rural land. Texas Parks and Wildlife directs landowners to their county clerk for the specific order.

Separately, municipal and extraterritorial jurisdiction discharge rules live in Local Government Code Chapter 229, which sets its own acreage and distance thresholds, and reckless discharge inside larger cities is a criminal offense.

Regardless of acreage, it is illegal everywhere to fire across a property line or a public road, or toward a residence without permission. And a valid Texas hunting license plus TPWD seasons and bag limits apply on your own land exactly as they do anywhere else. Call the county clerk and the sheriff's non-emergency line for a specific address.

Because the buyer pool is a fraction of the size and most of it cannot get a loan easily.

A house at a fair price in a growing market has hundreds of qualified buyers. A 40-acre tract has a much smaller universe, and a meaningful share of those buyers need land financing with 20 to 35 percent down. Marketing periods measured in months rather than weeks are normal and are not a sign anything is wrong.

Pricing works through the sales comparison approach, the same method as residential, applied to per-acre sold comparables and adjusted for the things that actually drive land value: usable versus unusable acreage, road frontage, water, tree cover, fencing and improvements, ag valuation status, and mineral rights.

For context on the direction of the market, the Texas Real Estate Research Center's Northeast Texas region, which includes Ellis County, averaged $9,313 per acre in the Winter 2026 report, up 4.4 percent year over year, even as sales volume declined.

Per-acre price is not linear. Ten acres does not sell for a fifth of what fifty acres brings. Smaller tracts routinely command a higher per-acre price because more buyers can afford them.

Three things to know, and the first one catches people.

There is no primary residence exclusion on raw land. The capital gains exclusion that shelters up to $250,000 or $500,000 of gain on a home sale does not apply to land you have not lived on. Gain on investment or recreational land is generally taxable.

A 1031 exchange is available and land qualifies as like-kind property, which lets you defer gain by rolling proceeds into replacement investment property under the applicable identification and closing timelines. This is a common and legitimate strategy for landowners repositioning.

Rollback exposure may surface at sale if the transaction is tied to a change of use. The rollback follows the conversion rather than the closing, so how the deal is structured and who is responsible should be negotiated in the contract rather than discovered afterward.

This is genuinely tax advice territory and I am a REALTOR, not a CPA. Bring your accountant into the conversation before you list, not after you are under contract. The structure matters and it is much harder to fix late.

Two of the most useful levers a land seller has, and both are more common here than in residential.

Owner financing genuinely expands your buyer pool. Because banks are reluctant on raw land and conventional residential financing does not apply, a meaningful share of interested buyers are shut out by financing rather than price. Carrying the note opens the property to them, and an installment sale can also spread capital gain recognition across years rather than taking it all at once.

Subdividing usually raises the total. Smaller tracts reach more buyers and typically bring a higher price per acre. The tradeoffs are real: survey and platting cost, county subdivision requirements, potential road and utility obligations, and the fact that converting ag land can trigger the rollback assessment before you ever sell a lot.

Run both scenarios with actual numbers before you decide. The higher gross from subdividing does not always survive the platting cost, the rollback, and the carrying time. Sometimes it does, substantially. That is an arithmetic question, not a philosophy one.