Most real estate investors are looking for any way to increase their margins. Property taxes can take up a large portion of what you would make otherwise. Honey bees are a pivotal piece of our ecosystem and very beneficial to the environment around us. Where do these interests collide? Agriculture exemptions, also known as, Ag exemptions!
By utilizing an Ag exemption on your property, you could save thousands of dollars in property taxes. County appraisal districts throughout Texas have established requirements that properties must meet in order to qualify for an Ag exemption. There are various livestock and plants listed along with their respective minimum acreages and count requirements. However, in many counties, the honey bee land requirement is significantly smaller than most of the other avenues. To find out what the acreage requirements in your county are, visit your county appraisal district website or call them directly.
According to Texas Agriculture Code, Chapter 131, Subchapter A, Section 131.001(2), an apiary is defined as "a place where six or more colonies of bees or nuclei of bees are kept". The two types of Ag exemptions are the 1-d and 1-d-1.
The 1-d exemption is for commercial operations and has the following requirements:
The land and the land owner must meet the following qualifications:
The land has been devoted exclusively to or developed continuously for agricultural use the previous 3 years;
The owner's primary occupation and source of income are agriculture; and
The owner intends to use the land for agriculture as an occupation or business venture for profit during the current year.
The 1-d-1 exemption is the most common type of Ag exemption and has the following requirements:
The land must meet the following qualifications:
The land must currently be devoted to an agricultural use and to the degree of intensity generally accepted in the area (county by county basis); and
The land has been devoted primarily to agricultural use for 5 of the preceding 7 years.
Generally, upon purchase of the property, title companies will require your house and related buildings be surveyed into their own respective tract separate from the acreage the Ag exemption is being used for. This allows for homestead and over-65 exemptions to be used for your residential tract and Ag exemption on the remaining, qualifying acreage. Consult your title company for more information.
Some land owners also allow someone else to run an apiary on their property while reaping the benefits of an Ag exemption. These arrangements are simple apiary agreements signed by both the land owner and the beekeeper.
There is a drawback however. The chief appraiser and county appraisal district keep a record of the market value of your property without the Ag exemption. If you change usage from an agricultural use of the property, the county will impose additional taxes (rollback taxes) at market value for the years covered in the roll back. The only way to avoid this rollback is if the property owner switches the exemption to a homestead exemption and it is maintained as such. Up to 20 acres can be converted to a homestead exemption without paying the rollback taxes.
If you're interested in increasing your property investment margins, reducing your property taxes, helping the environment and making delicious honey, do not overlook honey bees and their related Ag exemption. Feel free to contact us at Bertolatus Rodman PLLC for your free consultation today!
The information is not offered as legal advice upon which anyone may rely. Information in this article is provided for public informational and educational purposes only. No attorney-client relationship is created by the offering or reading of this article. This law firm does not represent you until expressly retained by written agreement. It is recommended that you seek legal and professional counsel for your individual circumstances prior to taking any action with legal implications.