AG Exempt Questions (Kaufman, Forney: leasing, houses, transfer)

[Gettin' Out of Cali]

We found a property in the DFW area we like, about 10 acres with a six stall horse/mule stable and a 2,300sf home.

The house+property are listed at about 320K, but the owner only pays about $4,500 in taxes because the land is AG Exempt.

Can anyone explain in simple english (like the kind a native Californian like me can understand) how this AG Exemption works?
Do I need to sell the hay grown on the land to keep it exempt?

What would cause me to lose this exemption?

I'd ask the current owner, but he is out of the country for the next few weeks and I'd like to put my offer in before he gets back.

Thanks for any input you can provide.

[vseale]

AG exemptions vary by county. Which county is the property in?

[Gettin' Out of Cali]

Originally Posted by vseale

AG exemptions vary by county. Which county is the property in?

It's in Kaufman. City of Forney.

Thanks.

[ChristieP]

I have a friend who lives in Kaufman County, and she has thoroughly researched the Agricultural Exemptions for her own use. Basically, when the property transfers to your name, the exemption will go away. After THREE YEARS of you using the property for agricultural purposes, then you can apply to the tax board to get the exemption back. She honestly decided it wasn't worth it for her because she couldn't meet the requirements.

You can't get an Ag Exemption unless the land is being used for agricultural purposes. Yes, growing hay is one of them, but that is going to be very difficult to prove on such a small tract and since you don't own your own baling equipment. If you kept horses on it, the horses would have to be actively used for breeding, as in there would have to be a foal born every year. (My friend has gelded male horses, so she couldn't count them!)

Good luck!

[ChristieP]

Oh, one more thing... you could get some cattle and put on the land, but again, you'd have to have a calf born every year...

[loves2read]

could you plant hay and let other people harvest it and sell it--lease out the acreage for planting?
What about leasing out the barn to other people for their houses--I know that sounds more like business permit...just couple of thoughts

[ChristieP]

Boarding stables does not count for an Ag exemption since you will make money on the land and it will (again) not be a horse breeding operation with a foal born every year. The exemption is to allow agricultural business (which operates on a thin profit margin anyway) to have an opportunity.
I don't know about leasing the land for hay; you'll have to check with the County. Most Texas hay is native coastal bermuda grass so there's nothing to plant, and 10 acres is too small to bother planting anything. It's honestly a little small to bother baling hay on, too...

[Gettin' Out of Cali]

Thanks for the answers so far...

I received a message from the realtor handling the property and he tells me that the AG Exemption transfers from "Farmer to Farmer".
I need to figure what makes a Farmer in the eyes of Texas law...

One other thing I'm noticing while driving all around this area.
It seems every small sized "Ranch" has at least two Donkeys.
I've never seen this in California. Anybody know why the Donkeys.
Does this have something to do with being a "real" Farmer?

[Spree]

>>Anybody know why the Donkeys.<<

Might just be a novelty? You're talking the cute little ones like the ones on Shrek? We had farmland behind our house in here FL, and they had a couple of them on their land as well as a couple of cows. There's a lot of goats running around on patches of farmland here too - funny you drive through rooftop suburbia and in between there's patches of farmland in between.

Your property sounds ideal, I hope it all works out for you guys.

[ChristieP]

Donkeys keep coyotes away from vulnerable livestock, like goats or young calves. They are low maintenance and low cost!

Don't ask your realtor about the ag exemption if you want an objective answer. Call the appraisal board... Kaufman County Appraisal District