Homeseading my property for tax purposes

[Lynnette]

Does anyone have any experience with homesteading their property for property tax purposes, and or listing your property as a tree farm to reduce property taxes. I live in Michigan, and so far have been unable to find any useful information regarding either of these processes.
Thanks

[mnn2501]

A homestead exemption for tax purposes is just declaring it to be your primary residence and has nothing to do with growing your own food or being self sufficent. Most states have a homestead exemption and it saves you on your property taxes.
If the place is your primary residence - do it!

[ronbre]

and it saves a bundle too..my son forgot to send in his papers and it was in the thousands he had to pay more for his taxes..however..they will give it back as he was able to prove it was his only home

[mnn2501]

Declaring your property to be a farm for IRS tax purposes is something entirely different than a property tax homestead exemtion. I would suggest talking with a good tax accountant thats familiar with doing farm tax returns before saying your a farm of any kind to the IRS. There are tax consequences - some good and some bad-- you'll have to weigh them to see if teh good outweighs the bad.

[RandB]

If you are looking for farmland tax assessment, that information should be available at your state agriculture dept.

[Bearfootfarm]

Originally Posted by RandB

If you are looking for farmland tax assessment, that information should be available at your state agriculture dept.

Around here you'd be dealing with the County, since there are no State property taxes in NC

[cc-rider]

If you are talking CAUV, talk to your county auditor's office. We just file some papers once a year in the spring stating that we still have at least 10 acres of trees (or hay, or whatever we have that year) and get a big deduction on our taxes. If you have less than 10 acres, you have to prove an income of $2500 a year. With more than that, you don't have to prove anything. Occassionally they drive by to make sure we've got hay planted, or whatever.

[marvella]

i did a quick goog le and couldn;t find it but arond here at least there is soemthing called a ge\reen belt tax exemption. you must have over 15 acres and a certain amount of that in wood land. it saves me about 1/3 on my property taxes.

[ET1 SS]

We filed a form with our state which 'declared' it to be our homestead [or residence]. It lowered the accessed value of our property by $13k.

If your 100 acre farm was assessed at $100k it would lower the assessed value down to $87k. If your taxes had been $100/year it would lower them down to $87/year.



As for income taxes; we file a schedule 'F'. Which is the only thing that you file with the Federal Government to say that you are a farm. It is the form where you begin to write-off your farm's expenses.

[Parrothead]

Check with your county tax office. Depends on the state, but my state does offer property tax exemptions for certain situations.

[Macybaby]

I remember doing that when I worked for the CPA in WI (farm property tax credit) but you filed it along with the state tax return. Was real fun on some of the farms that were divided in many chunks, adding them all up and doing the ratio and all (had to subtract a portion for the actual home too). There had to be a certain amount of farm income to get the credit though.

People get confused, because in many states, the "Homestead credit" has to do with it being your primary residence, and nothing to do with it being an income producing farm.

Cathy

[happycat]

You didn't mention if you have a mortgage on this property; if you do - or if you intend to get one on it or on another piece of property in the future, be aware that it may be harder to get financing with a "homestead" or "farm" distinction on the property or on your tax return.

[Maura]

As stated above, your primary residence is your "homestead" regardless of where it is. Your homestead will only pay 18 mills in school tax. Non homestead property may pay more in school tax if it is voted in. Ag land is all taxed as homestead property. Timber cutover and vacant land that is not worked (unless it is in a gov't program and you are being paid not to plant crops) is considered "residential" and will not be taxed as "homestead". A vacation home is not a homestead.

If you do not live on the property and you call it a "tree farm", it really should be a tree farm. When your assessor comes back in 8 years and you aren't selling those Christmas trees you will be charged with fraud. Yes, I had some guy try to pull that on me. He changed his mind about the tree farm. Also, the woman who put in a pumpkin patch for the kids. Not Ag. Putting in clover for the deer. Not Ag.

[ET1 SS]

Originally Posted by Maura

As stated above, your primary residence is your "homestead" regardless of where it is. Your homestead will only pay 18 mills in school tax. ...

18 mils that is kind of high isn't it?

[Beeman]

So you mean a phoney farm exemption, makes all of the real farmers happy.

[ET1 SS]

Originally Posted by Beeman

So you mean a phoney farm exemption, makes all of the real farmers happy.

As Mauar said if you claim to be doing something and your not, you will likely be charged with a crime.

How does this make someone happy?

[MN Gardener]

In our county (MN) they have a Green Acres program and a Forest Management program that will help reduce taxes. I would call your County Assessor's office and talk to them. They probably can sent the proper paperwork out so you can apply for the appropriate program.

[Bonnie L]

Here we have an exemption for forest land. Minimum 20 acres in forest reduces the taxes.

[CindyOR]

Here in our county there are agricultural exemptions and forestry exemptions and it really does make a difference in the amount of property tax you pay. But you do have to be doing what you are exempt for. In our case we replanted douglas firs on our property, so we have a forestry exemption. Our property taxes on 20 acres are approx $800 a year. Without the exemptions they would be close to $4,000.

CindyOR

[ET1 SS]

Here in Maine we have a group of land tax statuses.

Treegrowth, Open Space, Cropland, Marina, ...

I have roughly 150 acres in 'Treegrowth'.

A minimum of 10 acres, it needs a certified 'forester' to review it and form a written plan every few years [which usually costs $100 - $300], and it requires that the primary purpose of the land be to produce trees [even if no trees are currently growing there]. Within this you can still cut access roads as close as 40 foot apart from each other. You can house livestock underneath the forest canopy. You can grow any of the forest floor type crops. You can have a tree nursery. You can thin it to only maples and tap them. You can cut firewood. Or as the majority do, you can simply ignore it in the hopes that nature will plant trees and eventually they will become a valuable species worthy of harvesting.

The program sets the assessed value of the property at a set amount per acre, and if you ever take land out of this status there is a huge fine.

Our land was already in 'Treegrowth' before I bought it. So it was my decision to adapt our lifestyle and our 'homesteading' techniques to living beneath the forest canopy.

It works out that 'Treegrowth' land in this area costs about $1.05 per acre, per year in taxes.