Your cart is currently empty!
Agricultural Appraisal for Tax Valuation
The 1-d-1 agricultural appraisal in Texas is a special tax valuation method that permits landowners to have their property taxes assessed based on the land’s agricultural productivity rather than its market value. This can result in substantial tax savings for qualifying individuals. Contact us to discuss your options!
How this process works with honey bees as livestock:
The Texas Constitution authorizes two types of agricultural productivity appraisals: 1-d-1 and 1-d, named after their respective sections.
Texas land can qualify for a special appraisal (1-d-1) if it has been used for agriculture for five of the preceding seven years and is currently devoted primarily to agricultural use as defined by statute, used to protect federally listed endangered species under a federal permit, or used for conservation or restoration projects under certain federal and state statutes.
The land’s value is determined based on the annual net income from a typical lease arrangement over the five-year period preceding the year before the appraisal date by an owner using ordinary prudence in managing the land and the farm crops and livestock produced or supported on the land, including income received from hunting or recreational leases.
Under 1-d appraisal, the land must have been used for agricultural purposes for at least three years, and the owner must be an individual, not a corporation, partnership, agency, or organization. Additionally, the land must be the owner’s primary source of income.
Most landowners apply for the 1-d-1 appraisal. Renewals are required only if requested by the Country Appraiser or if the property transfers ownership.
*Penalties in the form of rollback taxes—the difference between taxes paid under productivity appraisal and taxes that would have been paid if the land were assessed at market value—are imposed if qualified land is removed from agricultural or timber production. A rollback tax occurs when a landowner changes the land’s use to non-agricultural. For 1-d-1 appraisals, these rollback taxes are based on the five tax years preceding the year of change. For 1-d appraisals, the rollback extends back for three years.
Qualifying for 1-d-1 Appraisal
To be eligible for the 1-d-1 appraisal with honey bees, the following criteria must be met:
| Agricultural Use: The land must primarily be used for agricultural purposes, including raising bees for honey production or other bee-related products. Degree of Intensity: The beekeeping operation must be conducted at a level of intensity generally accepted in the area, meaning that the management of bees should reflect typical commercial practices in the region. History of Use: The land must have been utilized for agricultural purposes for five out of the past seven years, which can encompass beekeeping or other agricultural activities. |
Application Process
To apply for the 1-d-1 appraisal:
| Application: Submit an application to the appraisal district in your county between January 1st and April 30th. Documentation: Provide supporting documentation for your agricultural use, such as evidence of bee ownership (purchase receipts), records of honey production or other bee-related income, photographs of your beekeeping operation, and any other relevant documentation. |
Appraisal and Tax Valuation
| Market Value of Your Land: Higher market values usually yield greater tax savings due to the differential between market and agricultural productivity values. Productivity Value: The appraisal district will determine the productivity value of your land based on the typical income generated from beekeeping, which is usually significantly lower than the market value. Tax Calculation: Property taxes will then be calculated based on this lower productivity value, offering considerable savings compared to market value assessments. |
Maintaining the 1-d-1 Appraisal
| Annual Reporting: While annual reapplication is not required, you may need to provide updates or documentation to confirm ongoing agricultural use. Change of Use: If the land’s use changes from agriculture, you may be subject to a 3-year rollback tax, reflecting the difference between taxes paid under the 1-d-1 appraisal and those based on market value. This is particularly the case when switching to from agriculture to business use. |
Important Considerations:
| Minimum Acreage: There is no minimum acreage requirement for beekeeping to qualify, but the land must be used to the degree of intensity generally accepted in the area. Note that some sources suggest a range of 5 to 20 acres for eligibility. Wildlife Management: Land managed for wildlife that qualified for agricultural use in the preceding year may also be eligible for the 1-d-1 appraisal. Changing Agriculture Use Type: and managed for agricultural use may be changed from one livestock category into beekeeping the proceeding year. There may be a change in the tax deduction value and proof of current beekeeping activities will be required- but this is very simple and straightforward! Local Regulations: Verify specific requirements or guidelines with your local appraisal district for beekeeping and the 1-d-1 appraisal. |
This process can be simple, straightforward and lead to approval of ag. appraisal for your property!
| Upon approval, you will witness significant property tax savings—typically between 85% and 95%. Do note however: converting the property to business use later on triggers a 3-year tax rollback. Beekeeping presents challenges, as does managing any livestock- but the agricultural valuation offers substantial financial benefits. That’s why you want to hire an experienced Beekeeper! It is much easier (and better for the bees) to have an experienced beekeeper on contract rather than trying to handle colony management yourself. It is not as easy as simply putting bugs in a box and leaving them there you’d be buying new bees every season, receiving many stings, and likely have the CAD office and your neighbors unhappy with you! But now you know who to call! Kirby, The Beekeeper! |
A Texas Tax Code snippet, for your reference:
Beekeeping is an agricultural use and shall qualify for agricultural use productivity valuation if used for pollination or for the production of human food or other tangible products having a commercial value. (Sec. 23.51(2) Tax Code).
(2) “Agricultural use” includes but is not limited to the following activities: cultivating the soil, producing crops for human food, animal feed, or planting seed or for the production of fibers; floriculture, viticulture, and horticulture; raising or keeping livestock; raising or keeping exotic animals for the production of human food or of fiber, leather, pelts, or other tangible products having a commercial value; planting cover crops or leaving land idle for the purpose of participating in a governmental program, provided the land is not used for residential purposes or a purpose inconsistent with agricultural use; and planting cover crops or leaving land idle in conjunction with normal crop or livestock rotation procedure. The term also includes the use of land to produce or harvest logs and posts for the use in constructing or repairing fences, pens, barns, or other agricultural improvements on adjacent qualified open-space land having the same owner and devoted to a different agricultural use. The term also includes the use of land for wildlife management. The term also includes the use of land to raise or keep bees for pollination or for the production of human food or other tangible products having a commercial value, provided that the land used is not less than 5 or more than 20 acres.