Property Tax Savings with Bees
By: Joe Bader
In 2012, a law was passed in Texas which allows property owners with 5 to 20 acres devoted to beekeeping to get an "Agricultural Exemption" for their land. This law, found under the Texas Property Tax Code 23.52, has saved landowners thousands of dollars in property taxes and it often increases their property sales value.
My wife and I are Advanced Master Beekeepers who have 350 plus colonies in the Texas Hill Country. We started our beekeeping adventure when we found out the agriculture valuation for beekeeping could be obtained on two of our properties. In the Spring of 2013, we bought twelve colonies: six for each property. We soon fell in love with our honeybees and have developed a deep passion for beekeeping.
In order to qualify, the land must have at least a 5-year history of primary ag use. Primary use means you have no other business use for the property. So, if you buy property in a subdivided ranch that was qualified as ag exempt, your property has a 5-year history.
If your property does not already have an ag use exemption, you will have to build that history. You must have bees or other ag on the property for 5 years before you can apply for your beekeeping ag valuation and get the benefit of reduced property taxes.
Each county has autonomy over how many colonies they require for each property. The number of colonies you’ll need on your land is called the degree of intensity.
Many, but not all, Texas counties require 6 colonies for 5 acres graduating up to 12 colonies for 20 acres. Importantly, both case law and the Texas Comptroller's Appraiser's manual say you do not need the full degree of intensity until the year you qualify. That means, during the building of your 5-year history, you don’t need all the required colonies on your land. You need some, but not all.
In my opinion, start with a few and build up over the 5 years. It is in the 6th year when you will need all the required colonies.
During the 5-year history building time, your goal should be to create a record that will satisfy the appraisal district demonstrating you have taken beekeeping seriously. When it comes time to prove your ag use, record-keeping will be critical. You should have receipts from your first purchase of bees and most subsequent expenses. It’s a good idea to keep receipts of all beekeeping purchases and take plenty of photos of your hives and beekeeping work during the years. Show your hives to friends. Keep records of how much honey you extracted. If you made any hive splits, keep records of those, too.
After you have built your 5-year history of primary ag use of your land, you can apply for ag valuation. It’s okay to apply as you begin building your history, but it is not required. The good thing about applying as you start building your history is that it puts you on the radar with the appraisal district. The bad thing about applying as you start building your history is that it puts you on the radar with the appraisal district.
The application process is pretty simple. The form for 1-d-1 Open Space is available at your appraisal district office or online. You must apply before April 30th of the year you qualify. You can apply late but there is
a stiff penalty. With 1-d-1, you do not have to sell anything. You only have to produce something of value.
When you have completed the 5-year history and have been approved by your County Ag Appraiser, you will begin to save money on your property taxes. Counties differ in how they value beekeeping land, but in general, you will save between 85% and 95% of the taxes you pay on land value. On your county appraisal district website, you can search for your property by address or owner's name. In that property search, you will find your land market value and your building and Improvement market values. If you are paying $3000 in property taxes for your land at market value, your agricultural value will be around $300. The savings can be significant.
You should be aware that if you convert a property that has qualified for ag valuation taxes to business use, there is a rollback of taxes for 3 years for the amount you would have paid in taxes at market value. If you intend to convert your property to business use in the near future, you may not want to apply for ag.
Getting an ag valuation on your property is a great deal for most property owners. I suspect if you're reading this, you’re already a beekeeper or you’re interested in bees. I want to encourage you to play by the rules. The wind is at your back and the rules are in your favor. Those that fudge on their taxes eventually get caught and damage the reputation of legitimate beekeepers working toward ag value.
Beekeeping is hard work and it's a relatively expensive avocation. Some bee colonies will die and that is painful and frustrating. As a beekeeper, there’s always more to learn and unfortunately more mistakes to make. But the great thing about the ag valuation opportunity is not just the tax savings and the associated increase in your property value. It is an opportunity to work with and learn from one of God’s most amazing creatures.
We offer zoom meetings that go into more depth and allow us to answer your individual questions. Find out more at www.beepeaceful.com.
Over the last several years, we’ve received hundreds of calls from people all over Texas who are looking into getting bees on their property so they can lower their property taxes with an ag valuation. Unfortunately, we can only help those who are in our area. If you are an experienced beekeeper who would like to become part of our team by leasing and managing your bees, email us a tx.bee.ag@gmail.com.
Joe and Lolita Bader - Bee Peaceful Beekeeping Sisterdale, Texas