A lot of the land around Taylor, Granger, Thrall and Coupland is taxed on agricultural valuation, often called an "ag exemption." It isn't technically an exemption. It's a special appraisal under the Texas Constitution's open-space (1-d-1) rules, and it can make a big difference in a tract's tax bill. If you're selling land, or buying land with plans to change how it's used, here's what to know.

Texas farmland at sunset

How ag valuation works

Land on 1-d-1 valuation is taxed on what it can produce in agriculture, not on its market value. To qualify, the land has to be used mainly for agriculture to the degree of intensity that is typical for the area, and it has to meet a history requirement.

What the Williamson Central Appraisal District looks for

The Williamson Central Appraisal District (WCAD) publishes its own ag guidelines. A few of the specifics from its manual:

  • History. Land outside city limits must have qualified and received ag valuation for 5 of the last 7 years. Inside city limits, it's 5 of the last 5 years.
  • Grazing. WCAD sets a minimum of 2 animal units. East of IH-35, the guideline is 4 acres per animal unit on improved pasture (8-acre minimum) and 5 acres per animal unit on native pasture (10-acre minimum). West of IH-35 it's 8 and 9 acres per animal unit.
  • Hay. Hay counts as cropland only when it's actually managed: fertilized, cut, baled and hauled, fed or sold. Unmanaged grass doesn't count.
  • Beekeeping. Tracts of 5 to 20 acres can qualify with 6 hives for the first 5 acres plus 1 hive for each additional 2 acres.
  • Wildlife management. Land that already qualifies can convert to wildlife use, with at least 3 of 7 listed management practices done each year.
  • Deadline. Applications are due before May 1. Late applications carry a penalty.

Milam County land is handled by the Milam Appraisal District, which has its own guidelines. Always check with the appraisal district for your county.

Rollback taxes: what happens when the use changes

When land on ag valuation changes to a non-agricultural use, such as a subdivision, a commercial site or a homesite that's no longer farmed, a rollback tax can come due. Since a 2019 change to the Texas Tax Code (Section 23.55, effective September 1, 2019), the rollback is the difference between the tax paid on ag value and the tax that would have been paid on market value for the three years before the change, plus 5 percent interest a year. Before that change it was five years at 7 percent.

A sale by itself doesn't trigger a rollback. A change in use does. That's why rollback taxes come up so often in land contracts: a buyer who plans to develop will want to know the number, and the contract should say who pays it.

Questions to ask before you sell

  • Is the tract on ag valuation today, and for how many years?
  • What would the rollback be if the buyer changes the use? The appraisal district can help you estimate it.
  • Does the contract say who pays any rollback?
  • If the buyer will keep it in agriculture, will the new owner file a new application?

Ag valuation is one of the things a buyer's team checks before making an offer. It sits alongside utilities, access, floodplain and ETJ. See what land buyers check, or request a free Legacy Land Value Review™ and we'll look at your tract the same way. Questions? Call Brad at 512-269-5278.

This post is general information, not tax or legal advice. Talk with your CPA, your attorney and your appraisal district about your property. Sources, checked 7 October 2026: Williamson Central Appraisal District Ag Manual; HB 1743, 86th Texas Legislature. Photo: farmland at sunset by Corey Leopold, CC BY 2.0, via Wikimedia Commons.