Texas is home to gorgeous ranches of various sizes, features, and functions. Having your own ranch in the Lone Star State can be a highly-rewarding experience. Here are just a few reasons why:
Huge opportunity to profit
One of the biggest benefits of owning a ranch is the potential to make money. Your ranch can be used for raising cattle or growing crops, as a horse boarding business, or even as a bed and breakfast. You can also lease part of the land and allow others to use it for their own business.
The opportunity to make a profit from a Texas ranch is also not limited by size. Even ranches that are considered too small for traditional crop farming can still generate income through other uses. No matter what kind of ranch you have, it’s always possible to profit from it with the right management and improvements.
Investing in a Texas ranch comes with tax benefits that can save you thousands of dollars each year. Ranchers are entitled to agricultural, property, and income tax breaks, as well as exemptions from certain state and local taxes.
Tax benefits for ranch owners in Texas include:
- Homestead Residence Exemption – Ranch owners qualify for several tax exemptions if they declare their property as a residence homestead, that is, the property is used as their primary home. These exemptions include:
- $25,000 on school district taxes
- Up to 20% of the property’s appraised value or no less than $5,000 on any taxing unit as decided by the local government
- $3,000 on farm-to-market or flood control taxes
- Up to $10,000 for seniors at least 65 years old and disabled residents
Owners cannot declare any other property they own in or outside of Texas as a homestead.
- Agricultural Tax Valuation – If you use your land to grow or raise agricultural products, it will be appraised based on its productivity rather than its real estate market value. This results in a lower valuation that reduces your property tax obligation.
- Wildlife and Conservation Tax Exemption – If your land or part of it is open space used for wildlife conservation, you’re entitled to pay a tax rate equal to the agricultural tax rate. To qualify for this benefit, you must submit a Wildlife Management Plan that details how the land will be used, the indigenous wildlife species to be protected in the property, and sufficient wildlife management practices and activities.
- Agricultural and Timber Exemptions – If you use your land to raise agricultural products for sale, produce timber, or other qualified agricultural uses, you may be exempted from paying sales taxes in purchasing products for use in your farm, including seeds, farm animals, off-road vehicles, and more.
- operating losses
- wages and other ordinary expenses
A working farm is also entitled deductions on:
Outdoor recreational paradise
Living in your own ranch means having endless opportunities for outdoor recreation. Go on a hike and explore the lay of the land. Invite friends and family over for a memorable picnic. Host the ultimate camping trip right in your backyard. And if your property comes with a body of water, you can cast your fishing line and try to reel in as many fish as you can.
Other possible recreational activities in a ranch are hunting, riding horses and riding ATVs.
Playing a part in protecting wildlife
Owning a ranch in Texas also gives you the chance to support the conservation of wildlife and natural resources. This is possible through the Texas Farms and Ranch Lands Conservation Program (TFRLCP), which provides monetary benefits to private landowners who protect their land from developments. It was created to prevent the rapid loss of farm and ranch land due to population growth.
The funds generated from TFRLCP are used in buying conservation easements. Should a landowner sell or donate an easement, they can still own the title to their land, provided that they don’t mine or construct a residential or commercial development on the property.
Freedom to develop
Real estate developments in cities and metro areas need to go through a rigid approval process. Building on raw land, on the other hand, only requires approval from the local county and municipal governments. With this freedom to develop, you can build any structure that you need for your ranch, whether it’s a five-star barn or a spacious guest house.
The gorgeous ranch view
Nothing compares to the amazing views in Texas ranches. Whether you’re searching for a small ranch for sale or a large estate, you are sure to find a property with the most magnificent views.
Are you ready to have your very own ranch or farm in Texas? Let the top Texas ranch brokers help you find the best property. Call Ranch Partners at 254.433.2561 or 254.631.3200 or send an email to jeffclarktexas(at)gmail(dotted)com to get started.