FORESTRY UPDATE by Gary Allen Burns 9-14
Qualified agricultural and timberland are taxed on productivity value rather than market value. To assist in the valuation, the appraisal districts use a capitalization rate. According to the State Comptroller’s Office in Texas, the 2017 timber cap rate is 7.39%, down from 7.53% in 2016. The timber cap rate is based on a 5-year average interest rate of the Farm Credit Bank of Texas as of December 31 plus 2.5 points.
For a history of the rate see:
https://www.comptroller.texas.gov/taxes/property-tax/caprates.php