21: Ag Value Assessment for Farmland
Agricultural assessment allows eligible farmland located in or outside agricultural districts to be taxed at its agricultural value rather than market value. New York State allows municipalities to apply a different assessed value for land used for agricultural production. This will reduce the total assessed value (for taxation purposes only) on parcels owned by an individual. Agricultural Value Assessment has to be applied for annually.
Why apply for agricultural assessments?
It can make a difference in the amount you pay in property taxes. You will be paying taxes based on the agricultural value of land determined each year by the state, not by local market conditions. In most cases the state’s values per acre are lower than your property’s assessed value unless you happen to be in a county where assessed values are low.
How does the Assessment work?
The assessment you receive is the difference between the local assessed value and the state’s agricultural values. The state publishes agricultural values annually for 10 soil groups and for woodlands.
To qualify for agricultural assessment:
- Must have a total of 7 acres of owned or rented land in production for sale of crops, livestock or livestock products.
- The same farmer must farm the land for at least 2 years
- A combination of farming enterprises must generate $10,000 in total sales (average for the preceding 2 years). Up to $2,000 in wood product sales (timber, logs, posts, firewood) can qualify towards the $10,000 minimum.
- Start-up farms are eligible if they generate $10,000 in sales in the first year of operation
- Farms on less than 7 acres qualify if they generate $50,000 in sales
- If at least 7 acres of land owned by a rural landowner is rented to a farmer (who meets the income requirements), it is eligible for agricultural assessment provided the landowner has a 5-year written lease with the farmer.
Proof of Average Gross Sales Value:
Assessors may request proof (tax returns or legitimate bookkeeping records) that you met the $10,000 gross sales requirement.
Types of farming enterprises that can qualify for agricultural assessment:
Field crops, fruits, vegetables, horticultural specialties (nursery, greenhouse), livestock and livestock products (includes dairy, meat, poultry species, horses, and exotics like ratites, farmed deer and buffalo, fur bearing animals), maple, honey, Christmas trees, aquaculture, woody biomass (short term crops harvested for energy), commercial horse boarding operations with 10 or more horses boarded at a time. All of these enterprises must also meet the other requirements listed above
Agricultural assessment is available for the following land uses:
- Land used in agricultural production that meets criteria – 7 acres, $10,000 sales
- Up to 50 acres of farm woodland used for the sale of woodland products (logs, lumber, posts, firewood); must be part of the farmed parcel(s) to qualify, it cannot be a separate tax parcel
- Support land including farm ponds, drainage ditches, land used for erosion control, hedgerows, access roads, land under farm buildings and tenant houses, land used for farm waste management (manure pits, etc.)
- Land set aside through participation in federal conservation programs
- Land under farm buildings
- Land associated with oil, gas, and wind development or extraction activities
- Silvopasturing is now a permitted land use to qualify for AVA:
Here are the details:
Land used in silvopasturing shall be limited to up to ten fenced acres per large livestock, including cattle, horses and camelids, and up to five fenced acres per small livestock, such as sheep, hogs, goats, and poultry. For the purposes of this subdivision, “silvopasturing” shall mean the intentional combination of trees, forages and livestock managed as a single integrated practice for the collective benefit of each, including the planting of appropriate grasses and legume forages among trees for sound grazing and livestock husbandry.
- Go to your county Soil and Water District Conservation office (SWCD) - complete a soils group worksheet. All land qualifying for agricultural assessment is grouped by soil type. SWCD will do this for you – there may be a fee and you will need your tax parcel numbers.
- Take the completed soils worksheet to your town/county assessor and obtain copies of the Agricultural Assessment Application (form RP-305). Complete one form for each parcel. The assessor will keep the soils worksheet on file. Make copies of the soils worksheet and application for your records.
- Agricultural assessment applications must be filed every year prior to the taxable status date (March 1). Agricultural assessment is not automatic – you must apply every year by the taxable status date. If you fail to apply, you will not receive the exemption. If no changes have been made in land used for farming, then after the initial application, you will file a short form RP-305-r.
- If you buy or sell land, make sure you complete a new soils worksheet and file a new Agricultural Assessment form to reflect the changes.
Land rented to a farmer for agricultural production is eligible for agricultural assessment if the land is subject to a written lease agreement for a term of at least 5 years. A copy of the lease or form RF-305-c must be filed with the assessor. Only the land actually used by the farmer will be eligible for agricultural assessment. Woodland is not eligible unless it involves sugarbush rental. Landowners must complete the application process described above to qualify – complete the soils worksheet, go the assessment office and complete form RP-305, and file every year before the taxable status date to receive the exemption.
Renting land to a qualifying farmer is a way for rural landowners, who do not farm, or small farmers who do not use all their land, to receive an agricultural exemption on land that is rented.
Exception from Minimum Average Sales Value Requirement
If a farm does not meet the $10,000 gross sale value in a particular year to weather or something else, they can file form RP-305-b in order to qualify to receive AVA. Here is the description directly from the form:
“Notwithstanding any inconsistent general, special or local law to the contrary, if a natural disaster, act of God or continued adverse weather conditions shall destroy the agricultural production and such fact is certified by the Cooperative Extension service and, as a result, such production does not produce a gross average sales value of ten thousand dollars or more, the owner may nevertheless qualify for an agricultural assessment provided the owner shall substantiate in such manner as prescribed by the Office of Real Property Tax Services that the agricultural production initiated on such land would have produced an average gross sales value of ten thousand dollars or more but for the natural disaster, act of God or continued adverse weather conditions.”
Penalties associated with conversion of agricultural land that has received an agricultural exemption:
- A conversion takes place when the land is actually converted from potential agricultural use to a built structure. Land that is sold, is no longer actively farmed and lies idle is not considered to be converted until something is built on the property.
- A penalty is assessed on the amount of land that is converted. This penalty is five times the taxes saved in the last year the land benefitted from an ag assessment, plus interest of 6% per year--compounded annually--for each year in which an ag assessment was granted (not exceeding five years) The penalty is assessed to the owner making the conversion, who may not be the farmer who sold the land but the new owner who changed the land use. The issue of who pays the penalty is sometimes negotiated when the property is being sold.
- This topic is complicated so it pays to speak with your assessor if you have concerns about the penalties associated with a conversion. Most often the penalty is not a deterrent to whatever change is being proposed.