Ag Exemptions and Why They Are Important

Key takeaways: 

• Agricultural exemptions can be an important tool for landowners to save money on their tax bills each year. 
• An ag exemption decreases the valuation of your property, in order to lower your property tax bill. Ag exemptions can also lead to savings on certain purchases.
• Many ag exemption requirements, including how many acres you need or which types of ag production qualifies, will depend on your specific county. Check your local comptroller’s website for local rules. 

This content has been updated as of February 2026.

The type of properties we offer loans for are as diverse as our group of borrowers. We offer products for individuals that thrive in the hustle and bustle of the city as well as those that need a little more wide-open space.

To serve our clients that live on acreage, Texas Farm Credit has unique products and guidelines. One of the principals that separates us from traditional mortgage lenders is we allow agricultural exemptions to remain on the property.

How to qualify for agriculture exemption 

An ag exemption is actually a special valuation. This idea of agricultural land valuation is rooted in the Texas Constitution. In simple terms, this means agricultural landowners will have their property’s taxes calculated based on productive agricultural value, as opposed to market value of the land. This can equate to significant tax savings. 

Many counties have their own appraisal district websites that outline specific eligibility criteria for agricultural valuations, including types of production (like honey or hay) and wildlife management. 

State Agricultural Departments often provide detailed guidelines on agricultural valuation and property tax exemptions. Texas A&M Extension Service provides guides and fact sheets on valuations and eligibility. 

At the local level you can consult with your county’s tax assessor’s office. This route will provide the most up-to-date information on eligibility and requirements.

Ag valuations are not easy to get. So once you secure one, it’s important to maintain it.

What are common ag exemption mistakes? 

Some common reasons for getting an ag exemption application denied include: 

• Missing deadlines. Check with your local property appraiser or comptroller’s office to understand your local timeline. 
• Failure to meet minimum acreage or animal requirements. Check out the FAQs below for some common rules around how many acres you’ll need, for example, or how many cows you need for an ag exemption. 
• Using your land primarily for non-agricultural purposes. To qualify for an ag exemption, you don’t necessarily need to run a profitable ag business — but you do need to engage in ag production. 

Why do other lenders ask for ag exemptions to be removed?

This usually is due to the risk of rollback taxes. If an ag exemption or valuation is lost on a property, the current or new owners could be responsible for three to five years of rollback taxes, including interest. This can be a tremendous financial burden for brand new landowners. 

Texas Farm Credit understands the significance of ag valuations for our customers and the future of the Texas agricultural industry. We ensure all our mortgage products allow ag exemptions to stay intact, so the only thing our customers have to worry about is how to make a little slice of Texas feel like their perfect home.

If you are interested in learning more about Texas Farm Credit and the products, we offer – give us a shout. We’d love the opportunity to work with you!

Frequently Asked Questions

What qualifies as an ag exemption in Texas?

Only land that is primarily used for farming or ranching activities, such as crop production, livestock production, dairy farming, beekeeping, aquaculture, and/or horticulture. 

To maintain the exemption, the land should have been used for agriculture at least five of the past seven years. The Texas Property Tax Code requires the land be used in a manner consistent with the production of income, even if the income is not significant.The land’s primary use can’t be non-agricultural, such as commercial enterprises, or recreational uses.

What is the minimum acreage to qualify for ag exemption in Texas?

These requirements vary by county. But you will usually need a minimum of 10-15 acres to be eligible for ag exemption. 

These rules could also vary based on the type of agriculture activity. For example, if you’re a beekeeper, you’ll need between five and 20 acres. Some counties don’t count one of those acres, if it has a homestead or other buildings on it, so beekeepers in those regions could need a minimum of six acres. The number of bee colonies required also varies by county, but it’s usually between six and 12.

Do horses count as an ag exemption? 

The short answer is yes, horses can qualify—but must meet agricultural-specific conditions. The animals must be kept for activities like breeding, training, or active working partners on the ranch or farm. Keeping them for recreational purposes does not make you eligible for an ag exemption. Keep thorough records of how the horses are used and if any income is generated. Make sure to check with your county appraisal district.

How many animals are needed for Texas ag exemptions? 

There is no one-size fits all benchmark, so this will depend on your county’s “intensity standards.” Standards are established based on how many acres of land are necessary to sustain an animal unit (1 cow, for example, or 5 sheep). These will depend on an individual county’s climate, since rainfall impacts how much land animals need to survive. Contact your appraisal district or the Texas Comptroller for your county’s specific requirements.

In Travis County, for example, you’ll need at least four animal units to qualify for the exemption. One unit could be one mature cow, six sheep, or seven goats.

Is an ag exemption worth it in Texas? 

Although the process to officially receive an ag exemption can require some extra work, landowners enjoy big long-term benefits. How much money you save will depend on your county’s individual tax rate, the value of the land, and how the land is categorized under the specific exemption in comparison to market value. For example, there is a market value and ag value, which is typically significantly lower than the market value. The tax is then calculated on the ag value at the local tax rate. In Colorado County, for example, if you owned 15 acres of ag exempt land, you could save more than $2,000 on your property tax bill. 

An ag exemption could also help you save money on purchases of certain items that are used for agricultural production. To claim this tax exemption, you’ll need an agricultural or timber registration number, which you can get from your local Comptroller’s office. There’s also a list of purchases that are always exempt, even without a registration number or certificate, including seeds, veterinary medications, feed, and more.

How to buy ag exempt land in Texas

It’s helpful to work with a real estate agent who has experience with rural land and understands your county’s acreage minimum requirements for ag exemption. Once you’ve found land to purchase, check to see if it already has an ag valuation. If so, be sure to maintain that valuation after purchase to avoid rollback property taxes. Learn more about how to buy ag exempt land in Texas here.

Is ag exemption better than a homestead exemption?

Both agricultural exemptions and homestead exemptions can save you money, but they serve different purposes. Agricultural landowners with an ag exemption will have their property taxes calculated based on productive agricultural values, as opposed to market value of the land. Ag exemptions are only for land primarily used for agricultural purposes. They are not easy to get and can be difficult to maintain. 

On the other hand, homestead exemptions in Texas are easy to receive and typically don’t require re-applications each year. They are a property tax break for homeowners living in their primary residence. No agricultural work is required to receive this exemption.

What animals qualify for ag exemption in Texas?

Cattle, horses, sheep, goats, poultry, swine and bees are among the most common that qualify. However, every county in Texas has unique rules and requirements. The best way to understand your specific opportunities is to contact the appraisal district in which your property is located. Begin by selecting your county here.

Do chickens qualify for ag exemption in Texas?

Appraisal districts often allow poultry to qualify, but the operation usually needs to be large-scale. Landowners with a handful of chickens in their backyard likely won’t qualify for an ag exemption. 

Some appraisal districts may require a formal application, documentation, and inspection of facilities. Begin the inquiry process by visiting the Texas comptroller’s website.

How many cows do you need to be tax exempt in Texas?

The number of cattle or other livestock needed to qualify for a Special Ag Valuation is based on the intensity standards for each individual appraisal district. The intensity standards for an appraisal district are typically defined as the number of acres of land needed to sustain a grazing animal unit. One cow, five sheep, or five goats are all considered individual animal units. The amount of acreage required for one animal unit varies drastically by geographic location in Texas due to average rainfall amount, among other factors.