Converting Ag Land to a Homestead: Watch for Rollback Taxes

When land with agricultural special appraisal is converted to a non-agricultural use, the owner owes a rollback tax. This is the difference between what was paid under the ag value and what would have been owed at full market value, for the three prior years.

There is an important exception: if you are converting the land to your personal homestead, the rollback tax does not apply — under Texas Tax Code §23.55(i), merely claiming the property as your residence homestead under §11.13 is not treated as a change of use. This matters for people buying rural acreage near Austin to build a home. Confirm the details with TCAD before you close — visit traviscad.org or call (512) 834-9317.