Texas Rollback Taxes When You Sell Land

Where this page fits. This page covers rollback tax on Texas land that has an agricultural appraisal. For the appraisal itself and other states, see the agricultural exemption guide. For unpaid taxes, see the Texas tax-sale guide.

Blueprint-style topographic survey titled Taxes and Valuation, with contour lines across a tract

What is the Texas rollback tax?

Rollback tax is an additional tax imposed when land that received a special agricultural or open-space appraisal changes use. Tax Code section 23.55(a) sets it at the difference between the taxes imposed on the land for each of the three years before the year of the change, and the tax that would have been imposed had the land been taxed on market value in those years. The Comptroller’s manual puts it the same way: the 1-d-1 rollback covers the three calendar years preceding the current year, so a change in 2024 reaches 2023, 2022 and 2021.

Partial change. If only part of a parcel changes use, the additional tax applies only to that part (section 23.55(d)).
Years already taxed. The additional tax does not apply to a year for which it has already been imposed (section 23.55(c)).
Which appraisal. This page is about the common 1-d-1 open-space agricultural appraisal. Other special appraisals have their own rules. Ask your appraisal district which one your parcel has.

For what an ag appraisal is and how it affects what your land is worth, see the agricultural exemption guide. This page covers only the Texas rollback.

Does selling land trigger rollback tax in Texas?

No. The Comptroller’s Manual for the Appraisal of Agricultural Land says selling the property does not trigger the 1-d-1 rollback. The statute is written around a change in the use of the land, not a change in who owns it (section 23.55(a)). What a sale does change is the appraisal itself:

New owner, new application. Under section 23.54(e), land that was approved for the appraisal stays eligible in later years without a new application unless ownership changes or eligibility ends. So a buyer who wants to keep the ag appraisal generally has to apply.
Exceptions to a new application. Section 23.54(e-1) says ownership is not treated as changed if the land passes to the former owner’s surviving spouse, or if the new owner uses the land in materially the same way, overseen or conducted by the same individuals as the year before.
Deadline. The application must be filed before May 1, and for good cause the chief appraiser may extend that by up to 60 days (section 23.54(d)). If a valid application is not filed on time, the land is ineligible for that year (section 23.54(e)).
If the buyer changes the use. A buyer who stops the agricultural use, or diverts the land to another use, is the one who triggers the rollback. That is why the buyer’s plans matter even though the sale does not.

Whether a particular sale and a particular plan add up to a change of use is a decision for the chief appraiser, not for us. Ask the appraisal district before you sign.

How and when is rollback tax billed?

The chief appraiser decides that the use has changed and sends the owner a notice. The bill comes later. Section 23.55(e) lays out the sequence:

The chief appraiser determines that a change of use has occurred and delivers a notice to the owner as soon as possible, with an explanation of the owner’s right to protest.
If the owner does not file a timely protest, or the final result of a protest is that the additional taxes are due, the assessor for each taxing unit prepares and delivers a bill.
The tax is due, and becomes delinquent with penalties and interest as for other property taxes, if not paid before the next February 1 that is at least 20 days after the bill is delivered to the owner.

The ordinary penalty and interest rules are in section 33.01: a delinquent tax incurs a penalty of six percent for the first month plus one percent for each additional month before July 1, with a twelve percent total for a tax delinquent on July 1, and interest of one percent for each month or part of a month. Our Texas tax-sale guide follows what happens next if a tax stays unpaid.

Who owes the rollback tax, and what is the lien?

A tax lien attaches to the land on the date the use changes, and the lien stays with the land. Section 23.55(b) says the lien secures the additional tax and any penalties and interest if it becomes delinquent, and that it exists in favor of all taxing units for which the additional tax is imposed.

On personal liability, the Comptroller’s manual says that the person who has title on the date the use changes is personally liable for the rollback tax, but the lien may be foreclosed against the land regardless of who is liable. It also notes that if land is sold at about the same time the use changes, the buyer and seller may dispute who owes. The manual says tax certificates on land with an agricultural appraisal must note the appraisal and state that the land may be subject to additional taxes.

That is why this belongs in the contract. If the use may change around closing, say in writing who pays any rollback and what the title company holds back. The statute assigns the lien to the land; it does not decide the deal between buyer and seller.

When does a change of use not trigger rollback?

Section 23.55 lists exceptions. The additional tax does not apply if the change of use results from:

a sale for right-of-way (23.55(f)(1));
a condemnation (23.55(f)(2));
a transfer to the state or a political subdivision to be used for a public purpose (23.55(f)(3));
certain economic-development transfers that meet the Comptroller’s revenue test (23.55(f)(4)).

It also does not apply if the land changes to a use that qualifies under Subchapter E of the same chapter (23.55(g)), and a small, specific exception covers certain not-for-profit cemetery land (23.55(j)). Separately, claiming the land as part of a residence homestead does not by itself change its use for this purpose (23.55(i)).

Do not assume an exception applies to your sale. Check the exact words of the section and ask the appraisal district.

Questions to ask before you sign

Does the parcel have a 1-d-1 agricultural appraisal today, and for how many years?
What would the three-year difference come to on this parcel? Ask the appraisal district or tax office for a written figure.
Does the buyer plan to keep the agricultural use? If not, who pays any rollback, and is that in the contract?
Is the buyer ready to file a new application before May 1?
Is only part of the parcel changing use?
Will the title company hold back any rollback tax at closing and confirm it in writing?

Nobody can promise a figure or a closing date before the appraisal district has acted. See the closing process.

A hypothetical rollback, worked through

Hypothetical example. The parcel, the owner, and every dollar figure below are invented to show the arithmetic. The statutes are real and linked, as read on October 25, 2026. Your numbers will differ.

Say you own 20 acres of pasture with a 1-d-1 appraisal. Assume the taxes imposed on the land were $300 a year in each of the three years before a change of use, and that taxes on market value would have been $2,100 a year.

Whole parcel. The difference is $1,800 a year. Over three years, the additional tax under section 23.55(a) is $5,400.

Part of the parcel. If only 5 of the 20 acres change use, section 23.55(d) limits the additional tax to that part. Assuming for simplicity that the difference spreads evenly across acres, that is a quarter of the whole, or $1,350.

Timing. Say the bill is delivered in March. It is due before the next February 1 that is at least 20 days after delivery, which is February 1 of the following year (section 23.55(e)). If it is not paid by then, penalty and interest begin under section 33.01.

The real inputs are taxes actually imposed and market-value taxes for your taxing units. Only the appraisal district and tax office can give you those.

Sources and further reading

Have a Texas parcel with an ag appraisal?

Send the county, parcel ID, the names on the deed, and a note on whether the land is still in agricultural use. We review whether the property fits our current acquisition criteria and tell you in writing whether we would buy directly or assign the contract. An inquiry is not a binding offer or a promise to purchase.

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