Ask a seller in Gillespie County how many years of back taxes a rollback covers, and you'll usually get a confident answer. Five years, plus interest, is what most people still say. It's what a lot of listing sheets still imply. It's also been wrong since June 15, 2021.
Texas changed the rollback tax rule twice in three years, and neither change made it into most of the guides still circulating online. If you're buying ag-exempt or wildlife-exempt land in Gillespie County, that gap between the old rule and the current one is worth more to you than most of the acreage math in the contract.
The Rollback Number That Stopped Being True in 2021
The rollback tax is what a county recaptures when land under an agricultural or wildlife management valuation stops qualifying, whether because a buyer builds a homesite, subdivides, or simply lets the qualifying use lapse. For decades, the penalty ran five years back at 7 percent interest. Two bills changed that.
House Bill 1743, effective September 1, 2019, cut the lookback period from five years to three and dropped the interest rate from 7 percent to 5. House Bill 3833, effective June 15, 2021, went further and removed the interest charge entirely for open-space and timber land. As of today, a change of use triggers three years of recaptured taxes and nothing more. No interest at all.
| Period | Lookback | Interest |
|---|---|---|
| Before September 1, 2019 | 5 years | 7% |
| September 2019 to June 2021 | 3 years | 5% |
| June 15, 2021 to present | 3 years | 0% |
The Texas Comptroller's own guidance confirms the current version: three years, no interest. If a listing, a seller, or an online calculator quotes anything higher, it's describing a version of the law that hasn't existed for more than five years. On a large Gillespie County tract with a wide gap between market value and productivity value, that difference between the old math and the current math can run into tens of thousands of dollars, money that never actually comes due.
The Exemption Rides With the Use, Not the Deed
The rollback number is the part people get wrong going in. The part that surprises them after closing is different: buying land with an active agricultural valuation does not hand you that valuation. The special appraisal attaches to the land's use, not to the person who owns it, which means the new owner has to file their own application with the Gillespie Central Appraisal District rather than inheriting the seller's paperwork.
That filing has a deadline. If you close and want to preserve the valuation, you need to submit your own 1-d-1 open-space application, typically by April 30 of the year following the purchase. Miss the window, and the appraisal reverts to market value for that tax year regardless of what the cattle are doing.
There's a related trap that catches out-of-area buyers more than anyone: closing in the fall, removing the seller's livestock, and planning to "figure out grazing in the spring." To a county appraiser, an empty pasture over a full season can read as a change of use, which is exactly what starts the rollback clock. Buying the land doesn't trigger the rollback. Letting the use lapse does, and it doesn't matter whether that lapse was intentional or just a scheduling gap.
If the seller had already let the exemption lapse before you closed, the timeline works against you differently. Most counties, including Gillespie, want to see agricultural use for five of the preceding seven years before granting full valuation to a new applicant. A buyer picking up land that fell out of qualifying use inherits that clock too, which is why requesting the property's appraisal history before you write an offer matters more than most line items in a standard inspection.
The Well Question That Doesn't Show Up on the Survey
Water in Gillespie County runs through a separate layer of paperwork that has nothing to do with the appraisal district. Every well in the county, regardless of use, has to be registered with the Hill Country Underground Water Conservation District. Domestic and livestock wells are exempt from the permitting requirement itself, but they still need to be on file with the District. Wells used for irrigation, commercial operations, or public water supply need an actual permit, and that permit comes with spacing requirements and production limits set by the District's board.
This distinction rarely shows up in a standard survey or title commitment. A buyer planning a small vineyard, a commercial event venue, or even landscape irrigation on more than half an acre needs to confirm well status with the District before assuming the existing well covers that use. The District's own registration forms make clear that a well drilled for one purpose doesn't automatically cover a different one, and retrofitting a domestic well into a permitted commercial one is its own process with its own timeline.
Why Some Tracts Carry a Lower Ceiling
Not all groundwater in Gillespie County is treated the same way, and the difference is geographic, not just regulatory. In 2006, the District designated two High Historical Groundwater Use Areas, HHUA I and HHUA II, covering parts of the county where decades of pumping, some dating back to the 1940s in the City of Fredericksburg's case, had already drawn the aquifer down. Wells in those areas face doubled spacing requirements for any new permit.
A more restrictive layer sits inside part of HHUA I: the Ellenburger Critical Groundwater Depletion Area 1, or ECGDA 1, a designation the county has formally recognized on its own site. Wells located in the HHUA, its buffer zone, or ECGDA 1 face a hard annual production cap of half an acre-foot per acre of service area. That's not a guideline. It's the ceiling.
This isn't an abstract rule sitting in a management plan somewhere. The Pedernales River Alliance, a local watershed group, has written up one recent case where a planned development on property inside ECGDA 1 went through a public hearing under the District's rules and received a permit for about 8.3 million gallons a year from two wells. The same write-up notes that four planned swimming and recreation areas would need roughly 119,641 gallons to fill. Those figures show the scale of water use that permitted projects in the area are working with. The same group, citing figures from the Gillespie County Economic Development Commission, counts more than 7,500 new lots or units proposed or under construction across the county. Growth and groundwater limits are running on the same clock, and a buyer who assumes "there's a well on the property" answers the water question hasn't actually answered it if that parcel sits inside ECGDA 1.
Before You Write the Offer
A few questions answer most of what matters here, and they're worth asking directly rather than assuming the listing covers them:
- Request the property's appraisal history from the Gillespie Central Appraisal District. Confirm how many consecutive years it has carried an active 1-d-1 valuation, not just whether it's currently exempt.
- Ask what specific agricultural or wildlife management activity is producing that valuation, and whether it's continuing uninterrupted through closing.
- Check the property's well registration status with the Hill Country Underground Water Conservation District, and ask specifically whether any well on the tract falls inside HHUA I, HHUA II, or ECGDA 1.
- If a change of use is part of your plan, run the three-year, no-interest rollback math yourself rather than relying on a figure that may reflect the old five-year rule.
- Address who pays the rollback if it's triggered. The Farm and Ranch Contract has a specific paragraph for this, and it's negotiable.
None of these questions slow down a deal that's already clean. They just make sure you're not the one who inherits a surprise that started before you owned the property.
A Few Direct Questions
Does buying ag-exempt land trigger the rollback tax? No. The rollback is triggered by a change in qualifying use, not by the sale itself. A buyer who continues the existing agricultural use and files a timely application faces no rollback at all.
What happens if I want to build a home on part of the tract? Only the acreage where use actually changes typically triggers the rollback, provided the appraisal district's records reflect the split. The rest of the property can continue under its existing valuation if the qualifying use continues there.
How do I find out if a well needs a permit? Contact the Hill Country Underground Water Conservation District directly. Registration status and permit history for a specific well are part of the District's public records, and confirming this before closing is far simpler than resolving it afterward.
Ag exemptions, rollback math, and groundwater caps are exactly the kind of detail that separates a smooth Gillespie County closing from one that generates a call to the appraisal district six months later. Topper Real Estate works these questions into every ranch and land transaction from the first showing, not the final walkthrough. If you're evaluating acreage in Gillespie County, schedule your Hill Country consultation before you write the offer, not after.
