04.06.06
Living in the Country
I was doing some research on property taxes in the country (Texas countryside). I started my search with terms like “Living in the country Texas Taxes” and “Property Taxes Texas Farms”. I didnt find much information aside from the Texas Property Tax Code 2006. The code states two points of information useful for individual land owners in the country (in otherwords, not a charity organization, religious organization, etc). First, depending on where you live, it is advisable to have your land classified, or if possible re-classified for agricultural use. In this case tax is not based on the value of the land, but on the value based on the land’s capacity to produce agricultural products. The second, which applies to all properties, is of course to apply for homestead exemption and each year you can, haggle the appraised value lower. Also, if you are over the age of 65 or a disabled person there are further exemptions. (You still have to fill out some forms). For a easier to read Q&A about homestead exemptions click here.
I later searched for subsistence farming. This took me to the wrong country- this term is more appropriate for small families in undeveloped, third world countries.
The last major search I did was for “earthship”, which are simply put, “green homes”. This article was at the top of the search results. The article states that unless you have an absolute allodial title(more on this below) you have to pay taxes, which of course can always be mitigate/offset/reduce. The article does mention reclassifying the land for agriculture use:
Or, if you have sufficient land to grow timber, you could have your property reclassified as a tree farm, which drastically reduces your property tax, but when timber is harvested you pay income tax on profits of the sale.
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Now I am a bit curious what happens if you never harvest your trees.
The most interesting idea in the previous article concerns “allodial titles”. It was a term I was unfamiliar with. Basically it means you own the land and nobody has a claim on it. This is in constrast to feudal claims where ownership can be “feud”-ed. The
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So what do we really have when we own a property? The property can still be accessed for creditors, taxes, and emminent domain. Furthermore, there are zoning laws and building codes the land owner must adhere to.
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karl long said,
April 21, 2006 at 12:58 pm
James,
I don’t know you and surfed my way here randomly. Have you also looked at putting land into a conservation easement? That is unless you plan on developing the land, but it goes to your comment of what if I never plan on cutting the trees. I have done basic, non-extensive research on land and taxes in texas and my understanding is that using the agriculutral exemption is the way to go unless you want to put it into easement. This is why almost every piece of rural property in texas has a herd of cows or other livestock. Really they should have Buffalo, but that is another issue. I don’t know if there is any way to totally avoid paying taxes, especially in this state that so heavily depends on property taxation for revenue.
Cheers,
Karl