Property Valuation
Texas ad valorem taxes are assessed by the county appraisal district. An agricultural landowner can reduce their taxes through the 'productivity value' (1-d-1) appraisal, which values the land based on:
AIts market value as residential land
BThe land's capacity to produce agricultural products based on net income✓ Correct
CThe original purchase price
DThe cost of all agricultural improvements
Explanation
Open-space agricultural land that qualifies for the 1-d-1 exemption is appraised based on its agricultural productivity—the income it can generate from agricultural use—rather than its market value. This can dramatically reduce property taxes on rural land, especially land near growing urban areas where market value far exceeds agricultural value.
Related Texas Property Valuation Questions
- A Texas appraiser values a large tract of land that will be developed as a residential subdivision. The appropriate method is:
- A Texas property has both a large garage and a pool. An appraiser values these separately. Which term applies to each feature's value contribution?
- A Texas appraiser determines a capitalization rate using market extraction. This process involves:
- Gross Rent Multiplier (GRM) is calculated as:
- A Texas single-family home appraiser uses the following sales. After adjustments, which comparable would they give the most weight to?
- If a commercial property has a net operating income (NOI) of $90,000 and comparable properties are selling at a 6% capitalization rate, the estimated value is:
- Under Texas law, a property owner who disagrees with their county appraisal district's value may protest. After the ARB hearing, if still unsatisfied, the owner can appeal to:
- In Texas, the assessed value for property tax purposes can be LOWER than market value because:
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