Agricultural Valuation
Ag Valuation Can Sharply Lower Taxes on Rural Land
Land used for farming, ranching, or timber can be taxed on its agricultural income value rather than its market value, which is often much lower.
Texas law lets landowners with qualifying agricultural or timber use pay taxes on the land's productivity value — what it can earn from farming or ranching — not what a buyer would pay for it. This is called a special-use valuation, not an exemption. The difference can be large.
To qualify in Hood County, you apply with Hood Central Appraisal District. The land must be in active agricultural use. Common uses include cattle grazing, hay production, pecan orchards, and wildlife management. If you stop farming and sell or develop the land, you may owe back taxes called a rollback tax. Check with Hood CAD before making changes to land that has an ag valuation.
Source to confirm: Hood Central Appraisal District — FAQs