Jen:
My ranch property has two values. The true market value, which would conservatively be $3,000.00 per acre and the ag exemption value of $72.00 per acre. My ag exempt taxes per year on six hundred acres is 540 bucks, but my taxes based on market value would be $24,000.00 per year. That is a huge difference in taxes, but it is based on acreage. The home on my ranch and one acre of land that it sets on cannot be ag exempt. Lee can deduct a few acres if he establishes ag exempt status. Texas does not have a state income tax so we get hammered hard on property taxes to make up for that. The tax man will somehow get his coins.
The cost of ag exempt land is built into the price. Ag exempt land sells for twice as much as non exempt land. It's a big deal if one owns much land.