Buying Exempt Land in Texas

Key Takeaways: 

• Some land may qualify for tax exemption based on its capacity for agriculture, timber, or wildlife habitat.
• Understanding this exemption is important, as you’ll need to maintain the land’s valuation after you purchase it. This will help you avoid rollback property taxes, which can be expensive.
• Agriculture and wildlife valuations are different, and you may have to create and execute a wildlife plan for the latter.
• Working with a real estate agent experienced with rural land can help avoid any issues.

This content has been updated as of July 2025.

When you’re looking to buy land, it’s important to research whether the property is under an agricultural land valuation — often referred to as a tax exemption. It sounds like a no-brainer, but this research is often overlooked.

Ag valuations allow for agricultural landowners’ property taxes to be calculated based on its capacity to produce crops, livestock, qualified wildlife, or timber — not its market value.

When you purchase a property under an ag valuation, you’ll have to maintain that valuation. It doesn’t automatically transfer for you.

Apply for the valuation with your local tax appraisal district. If you fail to apply, then the district finds out in a year or two you didn’t maintain that agricultural use, they’re going to bill you for rollback on property taxes.

Rollback tax is the difference between the taxes paid on the land’s agricultural value and the taxes that would have been paid if the land had been taxed at a higher market value. Interest can also be charged for each year from the date the taxes were due. Rollbacks can get expensive, fast.

You’ll also want to understand the difference between an ag valuation and wildlife valuation. You can get a wildlife valuation for maintaining and improving the habitat for wildlife in some way: anything from bird watching to a hunting ranch could qualify.

This valuation requires a yearly wildlife plan that has to be approved by the appraisal district. It’s not hard, but it does take a little effort to apply.

The process to qualify for an ag or wildlife valuation will vary from county to county, so spend some time with the local appraisal district where your land is.

The overarching guideline is the land must have been devoted exclusively to or developed continuously for agriculture during the past five years. Another general rule of thumb is 10 acres, but even that varies by county.

Most importantly, find a real estate agent well versed in rural land to help you in the buying process. The realtor you select should absolutely know how to determine if the property has an ag valuation or not.

And, of course, we are always here to help you through your journey. We’re not just a lender – we’re a resource. So don’t hesitate to give us a call.