Understanding Tax Breaks On Farm Lands

Property taxes are known by every homeowner. The senior citizens, disabled people, and other protected sections of the masses get special tax exemptions by the government. Residential tax breaks are known by all but do you know that there are special exemptions for the farm landowners as well?

If you are a farmer or an owner who is looking to save tax on farm land Texas, you need to know the basics and certain conditions where you can get relief from various taxes. There is no requirement to be a full-time farmer to get the tax advantages from the government; in certain cases, just a piece of agricultural land is enough to get the benefits.

Putting Spare Land to Agricultural Use

If you have land which is not being used, you can rely on a local farmer to grow any kind of crop. It is not necessary to become a farmer yourself because if you are already working full-time, it would be difficult to manage everything side by side. This will also bring additional revenue from the spare land and will exempt you from the tax which you otherwise need to pay.

Keeping Animals

If you think that the growth of some kind of crop is not possible on the land, you can even use it to keep livestock. Ask a person to take care of the animals and your land can be a place where they are kept. With the help of these animals, you can generate more income by selling dairy products. Hire someone who is used to do all the work so that no pressure comes on you. Even keeping a single cow will help you in declaring the area as agricultural land and will bring about a significant decrease in taxes.

Following the Rules

It is extremely important to stay on the right side of the law and pay attention to all the rules while seeking tax exemptions. In order to sell the product of your land, you need to take permission from the state government and a green signal from the local health department. There are certain rules which prevent planting a vegetable garden or selling items from your residential property even if you have the permit to carry out the business.

Taking Help from a Tax Accountant

With the help of a tax accountant, you can easily navigate through the rules placed by the government and find the best way out for yourself to carry out the business. If you intend to take your land back from agricultural use, you must be prepared for the annulment of the tax breaks. If you want to discontinue farming on your land, the state might ask you to return the exemptions which were made in the last few years.

It is convenient to save tax on farmland in Texas but extreme care should be taken so that you do not violate any of the rules set by the state.