Ag Exemption Rollback Tax in Texas: How Much You'll Owe (Calculator)

If land receiving Texas 1-d-1 open-space agricultural valuation changes to a non-agricultural use, a rollback tax may apply. It recaptures the tax difference for the three preceding years in which the land received the special appraisal. The change-of-use year is excluded, and Section 23.55 does not add rollback interest. Losing eligibility is not, by itself, proof of a change of use. This guide covers 1-d-1; the separate 1-d program has different sale and interest rules.

Understanding the rollback before it hits you is the only way to avoid a surprise bill from your county appraisal district. Use our rollback tax calculator to see what you'd owe based on your county's data. County guides like the Johnson County ag exemption guide cover how a local district handles requalification after a lapse.

How the Rollback Calculation Works

For each of the three years preceding the change in use in which the land received 1-d-1 appraisal:

Rollback tax = sum of (market-value tax - agricultural-value tax) for the three preceding qualifying years

Do not add an annual interest factor to a Section 23.55 rollback calculation. Delinquency charges can still apply if an assessed tax bill is not paid when due.

An Illustrative Dollar Example

Let's say you own 15 acres in a county with a 1.5% tax rate. Your land has been valued at:

• Market value: $600,000 ($40,000/acre)
• Ag value: $3,000 ($200/acre)

Each year, you've been paying taxes on $3,000 instead of $600,000. The difference in annual taxes:

• Tax on market value: $600,000 x 1.5% = $9,000
• Tax on ag value: $3,000 x 1.5% = $45
• Annual difference: $8,955

Assume those values and the tax rate were unchanged in all three preceding years:

The illustrative rollback is $26,865. Actual assessments use each preceding year's values, tax rates, and qualifying acreage; they do not simply multiply the current year's savings.

What Triggers a Rollback

The rollback is triggered when land that has been receiving agricultural valuation is converted to a non-agricultural use, an outcome that energy projects cause more often than owners expect (see our guide to solar and wind lease rollback risk). Under Texas Tax Code Section 23.55, the most common triggers are:

Selling to a Developer

This is the most frequent rollback scenario. You sell your 20-acre tract to a homebuilder who plats it for a subdivision. The moment the land use changes from agricultural to residential development, the rollback kicks in.

Who pays? Section 23.55 focuses on the owner who changes the use. A sale alone does not trigger a 1-d-1 rollback. Address any contractual allocation of rollback costs with your attorney before closing.

Changing Land Use Voluntarily

You stop running cattle and start using your land as a private recreation area. Or you build a commercial structure on ag-valued land. Any voluntary change from qualifying agricultural use to something else triggers the rollback. Note the distinction, though: an ordinary barn or shop that serves the operation is not a change of use, and our guide to outbuildings on ag-exempt land covers how the D1/D2 split works.

Failing to Maintain Qualifying Activity

If your county appraisal district determines that you're no longer using the land at the required intensity, they can revoke your agricultural valuation. This could mean:

• Your herd count dropped below the minimum stocking rate
• Your bee hive count fell below the requirement and wasn't replaced
• Your hay production stopped but you didn't switch to another qualifying activity
• You stopped performing the 3 required wildlife management practices

Loss of qualification and a change of use are distinct determinations. Ask the appraisal district which determination it is making; a rollback under Section 23.55 requires a qualifying change of use.

Subdividing the Property

Subdivision may affect eligibility. A Section 23.55 rollback depends on an actual change of use, not merely drawing new boundaries or transferring ownership. Commercial conversions work the same way: a wedding venue on ag-exempt land triggers rollback only on the acres physically diverted. Confirm how the district will treat each affected portion.

What Does Not Trigger a Rollback

A few situations that landowners worry about but that don't actually cause a rollback:

• Switching from one ag use to another (e.g., cattle to beekeeping) - as long as the land stays in qualifying agricultural use, no rollback
• Converting from ag to wildlife management - wildlife management valuation under Tax Code 23.521 is still an agricultural valuation, so this is not a change in use
• Death of the owner - if heirs continue the agricultural use, the valuation continues
• Natural disasters - temporary loss of production due to drought, flood, or disease doesn't automatically trigger a rollback, though you should communicate with your appraisal district

How to Avoid the Rollback

Maintain Your Qualifying Activity

The simplest protection is to keep doing what got you the exemption. If you're running cattle, keep the herd stocked. If you have bees, keep the hives above the minimum count. Build in a buffer - if your county requires 6 hives, maintain 8.

Plan Land Sales Carefully

If you're selling land that has an ag valuation, negotiate who bears the rollback cost before closing. In many transactions, the buyer accepts the rollback as part of the deal because they're converting the land use anyway. Get this in writing.

Switch Uses Before You Stop

If you're done with cattle but want to keep the exemption, convert to a lower-maintenance qualifying use - like beekeeping - before you sell or destock your herd. The key is that the land never stops being in agricultural use.

Convert to Wildlife Management

If maintaining active agricultural production isn't realistic anymore, a wildlife management conversion preserves your favorable valuation without the livestock. You'll need to meet the 3-of-7 management practices requirement and file a wildlife management plan, but it's a legitimate path to keeping the exemption.

The Rollback Clock

For 1-d-1 open-space land, Section 23.55 uses the three preceding qualifying years and does not add rollback interest. The separate 1-d program under Section 23.46(c) can trigger additional taxation on a sale and includes interest at the rate provided for delinquent taxes.

In fast-appreciating areas around Austin, Dallas-Fort Worth, Houston, and San Antonio, market values have been climbing steadily. That means the gap between ag value and market value grows every year, making the potential rollback larger each year you hold the exemption.

This isn't a reason to avoid an ag exemption - the annual savings far outweigh the risk for landowners who plan to maintain agricultural use. But it is a reason to understand the liability before you make decisions about selling or changing your land use.

What to Do If You've Received a Rollback Notice

If your appraisal district has already triggered a rollback:

1. Review the notice carefully - verify the market values and calculations are correct. If the notice itself is confusing, our guide on how to read your Texas property tax bill and appraisal notice walks through every line.
2. Check whether the change in use actually occurred - if you believe your land is still in qualifying agricultural use, you can protest
3. File a protest with your appraisal review board if you disagree with the determination. See our complete guide on how to protest your Texas property tax appraisal.
4. Consult a property tax attorney for rollbacks exceeding $25,000 - the cost of legal help is small relative to the liability

Find your county appraisal district's contact information and exemption requirements on our county pages.

Sources

Rollback calculation reviewed October 15, 2026.

• Texas Comptroller: Agricultural, Timberland and Wildlife Management Use Special Appraisal
• HB 1743, enrolled: three-year lookback
• HB 3833, enrolled: removal of 1-d-1 and timber rollback interest