Another "land locked" property question - Texas Ghost Town

[dodge man]

I agree with some of the others, are you trying to save a dollar by spending ten? I'd try and work with what you have.

As far as the ghost town. I doubt thats the case. There are several towns in my area that were platted to be fairly large towns, but never developed. Some are still they with several houses, while others may just have a house or two. If you really want to buy property in that area, I'd talk to the local guy, he probably farms it all and leases what he doesn't own.

 

[dave1949]

Here, they also exempt forest land. Of course, there might not be any "income" to show for forest land for 50 or more years.

That's true.

We have a state "Tree Growth" property tax reduction program here. It does have a minimum of ten acres required, and a management plan by a licensed forester that is updated every ten years. Not that they check much, but you could loose your reduction if the management plan isn't being followed. The program is based on the concept that eventually, wood will be commercially harvested.

As you noted, forestry is a bit different than farming since you accumulate operating and development expenses, but only receive income very sporadically. IRS Form F is used to compute your past accumulated basis in the forestry operation, filed in the year the forestry income is generated.

That is different from regular farming where an annual income, or anticipated income within 3-5 years (IIRC), is the norm, and no long term management plan requirement by the state.

The Feds don't care if you have a forestry management plan, but the state requires it. We have high government expenses because we have a multitude of overlapping programs and tax policies that only a specialized accountant and/or lawyer can deal with. That's my theory and I'm sticking to it. :laughing:

 

[Ken45101]

In Ohio, forest land and farm land are administered under the same tax reduction (CAUV -current agricultural use valuation) program.

 

[Lou66]

I have an Ag account,, also have 70 plus acres,, I have people that will buy a few acres 5-100 and ask me to put it under my Ag,, I can use it as I see fit.. I do sometime if the property is worth it to me.. the difference in taxes can be several thousands dollars,, I have one acre on the bayou that I pay three times more in taxes than I do on the 70 plus acres,, I don't live on either,, We live in town, Lake Jackson, all of the property is with in 20 miles radius of me.. I know in Brazoria county you have to have 10 A or more for an Ag Ex.. or someone else, with one uses it.. haying, cows or goats.. horses only count if a pre cent are brood mares,, it is 200 lbs pre acre, or one cow or one horse for 5 acre, one goat for 1 acre,, and so on.. but money wise if you can Ag it then give it a try.. Lou

 

[hawkeye08]

You asked about how they figure the homestead part, for us here, they use aerial maps and computers to figure the acreage that is home vs farm. For us, you can clearly see the lawn around the house and outside that is the farmland. It is a pain to provide the paperwork every few years, but worth it in tax savings. Good luck..

 

[dmccarty]

Visit you local extension office and have a chat with them and/or get their documentation. The NC Extension office has a very helpful website so check if your state does as well. In NC one can lower property taxes on timber and farm land. For the timber valuation there was a size requirement, I think 20 acres, but one could combine parcels. The Extension office had quite a bit of information about the process and requirements AND had classes from time to time. They just had a class on this very subject in the last few weeks.

In NC, you there was no a time requirement to get the valuation but if you sold the land for N number of years after getting the valuation you had to go back and pay taxes as if there was no timber or agriculture valuation.

When we were looking to buy land we were not finding any to buy. I was visiting the county GIS and Deeds offices looking at maps and reading deeds. I was creating a list of parcels that met our requirements and that were owned by people living out of state. The plan was to look at the parcels and then send out mail to see if the owners were willing to sell. In the end, we did not do this because a parcel came on the market and we were able to buy it. Spending a bit of time in the court house was interesting though. I had some informative talks with county employees, one of who was a neighbor of a parcel we were looking at buying. She was very helpful in that case because she gave me some missing information.

The vast majority of the county employees we talked too were very helpful and friendly. Now, there were a couple of raging holes but eventually they were fired. The employees are dealing with these issues every day and SHOULD know what they are talking about and they certainly hear things.

Just reading some of the deeds was just danged interesting. Property lines marked by trees on a creek or a rock in a road that now longer exists made some interesting reading. :laughing::laughing::laughing:

Later,
Dan

 

[ustmd]

For those of you in the other 49 states, the great state of TX allows a significant amount of discretion to the various appraisal districts for granting ag exemption on property taxes.

I am with the others, that this may be more trouble than it is worth.

I am in Travis county. In this appraisal district, if you homestead, then automatically the value of the house and 1 acre of land is excluded from the ag exemption. The district here also will consider plots smaller than 10 acres for the ag exemptions, but you have to show evidence of supplemental feeding, etc to demonstrate that you are engaged in a sustainable commercial business (raising animals/growing food for you own consumption is not considered). Also they have a formula for numbers of animals per acre/per type of land (wood, grass land etc) you need to be raising (x number goats, or y number of cows).

Also, the county, here, is cracking down on the sale of land locked parcels--there maybe a reason all of those parcels have not changed ownership in so long. The county is requiring for a tittle change that the parcel have access to a public road either by easement or by continuity with a parcel with a same owner that has access to a public road.

Finally, for some good news. Ag exemption and the sales tax exemption are two separate and unrelated processes. Generally, if you have the ag exemption than the sales tax exemption will be given automatically when you apply, but you can get the sales tax exemption fairly easily even without the ag exemption. My in-laws, who live next door, on 8 acres just got the sales tax exemption because of horses.

 

[two_bit_score]

This is the kind of info I need! Thanks!! The thing I understand it as, is that you have to have already been engaged in agricultural activities on the land for the last 5 years before they even give you the exemption. The other thing is - how does the property the house sits on get excluded if it's all one property? Worst case I'll just continue to pay taxes, but it would be nice to have additional land even if it is part of a larger parcel that's being farmed for now.

Thanks for the info on the ghost town. It's pretty unlikely that you have stumbled across any property that is available to be bought. Stranger things have happened though so I'd like to see how this turns out.

As to your original objective to get your property in Ag, you should just go to the appraisal district and file the request then sit down with them and discuss your options. The best bet may be 'wildlife management' rather than trying to put one cow and claim its a farm. An owner generally has to be able to sustain the animals on the land and be producing Ag products for sale not just personal consumption to qualify.

 

[jinman]

My general opinion is you are likely to get into more hassle with the ag exemption than it is worth on such a small acreage. As Dodge Man said, you may spend more than the exemption is worth. I used to have 33 acres and now have 22 after selling one tract. None of my property is fenced and there are no structures for animals. The land is not good for crops of any kind except maybe orchards.

With around $1000 per year in taxes (county and school), I cannot justify going out and spending huge sums to fence my land and build structures for animals, not even chickens. I can leave my land clear and open. Also, when I want to go somewhere, I shut off water to my house and go. I don't have to make arrangements for anyone to take care of my animals. We put our four kitties at a kennel if needed, and that can even be more than the taxes if we are gone for 10 days or more. I just can't bring myself to seek exemptions when my tax burden is reasonable. If for some reason, my land value jumps through the roof, perhaps I'd be wise to sell it and move on. Since I own my land outright, I consider the taxes as rent. It's very cheap rent to not have the hassle of city life.

 

[dave1949]

In Ohio, forest land and farm land are administered under the same tax reduction (CAUV -current agricultural use valuation) program.

Oh, we have that too, and several other categories of property tax reductions aimed at preservation of land use, other than for development, by lowering tax burdens on "current use."

Not to sound like a sour puss, but all these programs are well-intentioned bureaucracy breeders that drive up the cost of government and our cost of complying with government. Plus, the state legislatures and congress feel the need to tweak them on a regular basis, thereby fomenting new rules, more rules, and obsolete rules that keep lawyers and accountants employed and taxpayers confused.

Taking Maine as an example, we have an ageing almost static population, and 90% of the state is forested. Do we really need a program to encourage growing trees? If the actual goal is to support the paper industry, which current programs are not really doing well, then I could see strong tax incentives for very large single or cooperative properties only, thereby encouraging the preservation and formation of the large tracts of managed forest that actually help economical wood products production. Forests cannot be economically managed and harvested 10 acres or two truck loads at a time.

I think it is all related to a need to simplify our tax codes which would contribute greatly to reducing government overhead. We need "structural" or "transformative" changes, or pick your current buzzword.