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Texas · Property Code §5.010Texas notice of possible additional taxes on land sales (§5.010)

When an owner contracts to sell vacant land in Texas, the contract must include the bold-faced “Notice Regarding Possible Liability for Additional Taxes”: if the land is appraised below market value under a special method such as agricultural use, the buyer may not qualify for it later, and the transfer or a change of use may trigger additional taxes plus interest (Property Code §5.010). The notice is not needed if the contract expressly allocates those taxes. If it is missing, the buyer can recover the additional taxes and interest from the seller.

The rules

  1. When

    A contract to transfer an interest in vacant land; the notice is bold-faced and states that special appraisal may end and that a transfer or change of use may bring additional taxes plus interest.

  2. Alternative (§5.010(d))

    Not required if a separate paragraph of the contract expressly provides who pays additional taxes and interest from the transfer or a later change of use.

  3. Missing notice (§5.010(e))

    The buyer may recover from the owner the additional taxes and interest caused by the transfer, or by a change of use before the fifth anniversary of the transfer.

  4. Exempt (§5.010(b)–(c))

    Court-ordered and foreclosure transfers, bankruptcy trustees, fiduciaries, mineral, leasehold or security interests only, government, co-owners, spouses and lineal relatives.

What the TC tracks

  • The appraisal district record: is the land under special appraisal this tax year?
  • The notice, or the tax allocation paragraph, in the contract.
  • The buyer's plan to reapply for special appraisal after closing.

Questions about the Texas additional tax notice

What is the Texas ag rollback notice in a land contract?

The bold-faced Notice Regarding Possible Liability for Additional Taxes required by Property Code §5.010 when vacant land is sold.

Can the contract replace the notice?

Yes, if a separate paragraph expressly provides for payment of additional taxes and interest from the transfer or a later change of use (§5.010(d)).

What if the seller leaves out the notice?

The buyer may recover the additional taxes and interest from the seller, including those from a change of use within five years of the transfer (§5.010(e)).

Related guides

Add the appraisal check and the tax notice review to the land deal as tasks with owners and due dates in ClosingCode.

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Source: Texas Property Code §5.010 (statutes.capitol.texas.gov, read October 24, 2026).

General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage.