Farm and ranch land: why it is taxed on what it grows (DRAFT – not published)

In short

Most land is taxed on what it would sell for. Land used to farm, ranch or manage wildlife can instead be taxed on what it can produce.¹ In Williamson County that land would sell for about $11.1 billion in 2026, but it is taxed on about $105 million.² If the owner later builds on it, they owe back taxes for three years.¹

How it works

• What counts: Land used mainly for farming, ranching or wildlife management, to the level that is normal in the area.¹
• History needed: In most cases the land must have been farmed or ranched for five of the last seven years.¹
• How it is valued: The appraisal district values it on the average income the land can earn, not on sale prices.¹
• Applying: The owner applies to the appraisal district before May 1. After that it carries over until the owner or the use changes.¹
• Inside a city: Land inside city limits usually does not qualify, with some exceptions.¹

People often call this the “ag exemption.” It is really a different way to value land, not an exemption.¹

How big it is here (2026)

	Amount
Sale-price value of farm and ranch land	$11,100,848,526
Value it is taxed on (use value)	$105,475,850
Taxed value as a share of sale value	about 1% (our math)3
All property in the county, sale-price value	$187,383,375,022

Source: appraisal district certified values, 2026, totals of the school-district rows (our math).²³

• Leander ISD area: about $494 million of farm and ranch land is taxed on about $394,000.²
• Trend: The sale-price value of this land was about $4.7 billion in 2016 and $12.3 billion in 2025.²

Does it shift tax to others?

• A rough upper limit (our estimate, not an official figure): About $11 billion of value is not taxed because of this rule. At the county’s 2026 rates, that would be about $46 million a year in county tax.²⁴

How we got the $46 million

1. Sale-price value of farm and ranch land: $11,100,848,526.²
2. Minus the value it is taxed on, $105,475,850, leaves $10,995,372,676.²
3. County rate plus road rate: $0.381218 + $0.040329 = $0.421547 per $100.⁴
4. $10,995,372,676 ÷ 100 × $0.421547 = about $46.4 million.

This is our estimate, not an official figure. The spreadsheet has errors in some other columns, but we found none in the two farm-land columns. Each is the total of the school-district rows.

• That is not the real shift. The county sets its rate based on the value it can tax, so this figure does not show how much other owners pay. We could not find a way to measure that.

When the land changes use

If the land stops being farmed, for example when it is sold to build homes, the owner owes extra tax.¹ It is the difference between the tax paid and the tax on full value for each of the last three years. Interest is not added unless the bill is paid late.¹

The other side

• Supporters say it keeps farms and ranches from being taxed out of business as the suburbs grow.
• Critics say some land qualifies with very little farming, such as a few cattle on land waiting to be developed. Then other owners pay a larger share.
• Both are fair points. The break is large, but the three-year back tax takes some of it back when land is developed.¹

What you can do

• Look up a property’s value and type on wcad.org.
• If you own rural land, ask the appraisal district what use it needs for this value.

Questions to ask

• How much back tax has the tax office collected when farm land was developed?
• Where does the appraisal district report the tax shifted by farm land values?

Changes to this page

• Nov. 2, 2026: Removed a guess about how the county would set its rate.
• Nov. 2, 2026: Added questions to ask.
• Nov. 2, 2026: Added a note that shows how we worked out the figures.

What we still don’t know

• How much tax this really shifts to other owners each year. The $46 million figure is only an upper limit.
• How much back tax was collected when land was developed. The county’s audit leaves these back taxes out of its tax tables, and the appraisal district’s report does not give a total.⁵

Numbers marked “our math” are our estimates, not official figures. The notes show the inputs and the steps.

Footnotes

1. Texas Tax Code ch. 23, subchapter D, §§23.51, 23.52, 23.54, 23.55 and 23.56 (open-space land). Saved copy. https://statutes.capitol.texas.gov/Docs/TX/htm/TX.23.htm ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹

2. Williamson Central Appraisal District, Certified Values 1999–2026 spreadsheet (columns AgMkt and AgUse; Taylor ISD 3.13 rows left out). Saved copy. https://www.wcad.org/historical-data/ ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷

3. Our math. $105,475,850 ÷ $11,100,848,526 = 0.95%, about 1%. ↩ ↩²

4. Williamson County Tax Office, 2026 Tax Rates and Exemptions by Jurisdictions: county 0.381218 and road 0.040329 per $100. https://www.wilcotx.gov/DocumentCenter/View/22307 Upper-limit math: $10,995,372,676 × 0.421547 ÷ 100 ≈ $46.4 million. ↩ ↩²

5. Williamson County FY2025 annual report, property tax levies and collections table, note “does not include Agriculture Rollbacks” (saved copy; public copy https://emma.msrb.org/P11938140.pdf); Williamson Central Appraisal District Annual Report 2025, special valuations. https://www.wcad.org/wp-content/uploads/2025/11/Annual-Report-2025.pdf ↩