Registering as a farm

Tax wise, it was simple enough. Schedule F with the IRS.

Land use redesignation, not doable. At my size 50% of my income has to come from the farm in order to get the land redesignated agriculture. Because I have a decent job, I am prohibited from becoming a farm.

Foxtrapper
Where is your location? Is this 50% of your earned income, net or gross for redesignation? What about tree farmers? Paydays for tree farmers are far apart and in most areas tree farmers qualify for land use deferrals of property tax.

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Agmantoo
If they can do it,
you know you can!

Jan, I don't know about your local taxing authority, but here, it's not just one person making the final decision. He might rule against you, but then you have protest rights in front of a committee of people. I was disallowed on my first protest of some timberland I bought... Was successful in the committee, getting the pine plantation rate down to the mixed forest rate... a savings of 6$/acre year... quite a savings.

On our yearly appraisals, they send out an official protest form. Anything we don't like, we can protest. Can't hurt to find out!

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Luck is what happens when preparation meets opportunity. Seneca
Learning is not compulsory... neither is survival. W. Edwards Deming

My land in Virginia is zoned agriculture forestal BUT the tax commissioner has many sneaky devious ways to deny citizens the rural discounts. First, you have to be a "farm" for five years before you get a discount. Second, you have to have livestock in units - such as a minimum of 100 chickens, 16 beehives, I forget the other numbers but certainly more than homesteader numbers. There were so many requirements that forestal is easier but oopsies, you have to have a minimum of 20 acres, a forestry stewardship plan, can only apply at certain times of the year and more.

This is all written out somewhere. Just talking about it was too much for me! I gave up!

My incredibly frustrating conversation was in the county tax office. I did not attempt to deal with state and IRS but I doubt they would be any easier.

Your best bet would be to ask your local ag or forestry agent for advice. There is probably the specific information you need in writing on the internet somewhere if only you can find it, which you probably can if your ag agent aims you in the right direction. Good luck!

Don't remember and it didn't matter.

Tree harvesting is separate from farming and the land does not inherently qualify as agriculture. The timber easement has nothing to do with land use designation. Btdt.

foxtrapper
I have tree farms in 3 states. Those 3 states give the same deferral to tree farming as they do to agriculture. As long as you get property tax relief what does it matter what the program is called? Actually a tree farm gets a better break in that a person does not have to show the earmings (gross earnings) for a specific period to qualify. A formal program for the management of the trees is necessary however.

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Agmantoo
If they can do it,
you know you can!

Agriculture is commerce. Woods are trees. A grant of woods in a deed or will includes the land underneath. A forest could be said to be a woods that has been embarked upon a commercial journey. Cut the first tree for commercial reasons and the woods has now become agricultural.

It is the commercial use that is taxed.

Candace - just wanted to say thanks for starting this thread. It's something that's been on my mind for awhile too.

No, a timbering easement does not change the designation of the land. A timber easement is an easement to the wood itself. Just as a utility easement does not change the land designation. Residential land with a utility easement still is designated a residential property. I have not ever seen a timber easement that granted the land itself to the easement holder.

Easements of any type may contain monetary stipulations. Many times they are to the land owner. In the case of agricultural easements, reclamation easements, wetland easements, etc, there is a small payment to the land owner for a few years. This in no way matches the monetary gain that would be realized by having the land redesignated agricultural use. We're talking a few hundred dollars vs thousands of dollars, and a few years vs perpetuity. Timber easements typically are similar, with a small monetary award going to the land owner for forgoing ownership of trees.

Remember, this is all about small land parcels. I am not talking about holders of many hundreds of acres of cropland, or timberland for that matter. We were talking about a homesteader wanting to get a few acres redesignated agricultural use. Property taxes are based on appraised value of the land. Around here agriculturally designated land is appraised and taxed at a much lower rate, 70-90% lower as I recall. Commercial and residential vie each other for the highest rates. This is why many people with a few acres of residential land desperately want to get it reclassified as agricultural, and why the state and county have a vested interest in not granting that reclassification. This in part is why the process is so difficult. The smaller the parcel of land, the harder it is to achieve. Below 40 acres, it gets difficult. Below 5 acres, it's effectively impossible.

foxtrapper & palani

In North Carolina two types of properties, agriculture use and forestry, qualify for a private owner to get property tax deferral. For agriculture to qualify the property must be 10 acres or more excluding the home site and the income (gross) must be $1000 or more per year for the previous 3 years in order to qualify. For forestry deferral the acreage must be 20 or more and the trees must be under a formal management program prepared by a professional forester. Once you qualify for either agriculture or forestry deferral the private owner can add additional acres in any county within the state and there is no limit as to the size, large or small. I do realize the requirements and acreage size varies from state to state. However, what I just typed does apply where I live. PS ..... I have a small tract of timber that is only 4 acres that qualifies. I have a large tract, by my standards, in Virginia that does not apply as the state of Virginia permits each county to decide if they want to participate in a deferral program and tax property based on its ability to produce. We do farm trees here. Fraser fir Christmas trees are a big business in western NC and land rent is as high as corn ground in the corn growing states.

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Agmantoo
If they can do it,
you know you can!

Mine too! Lots of good info in the responses as well.

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Our homestead-in-the-making: Palazzo Rospo
Eating the dream

I also appreciate this thread. However, I'd like to comment on what Agmantoo said: "Once you qualify for either agriculture or forestry deferral the private owner can add additional acres in any county within the state and there is no limit as to the size, large or small." In my county in Virginia, Orange, I have 3 adjoining separate parcels. One is somewhat over 15 acres. Our tax commissioner "deducts" one acre as a "house site" then, even though the boundary line is shared with contiguous to another parcel which meets her 20-acre minimum, she refuses to accept the concept of contiguous and says the "14" acres is not 20. Tax commissioners have. "Discretion" and the power to make arbitrary rulings so what is true for agmantoo is not true for me, too, even in the same Commonwealth of Virginia. Darn it!

Navotifarm
You need to talk to someone with farm bureau. We had an employee with the local county tax office try to interpret the rulings to his own satisfaction. After a major uproar and some reps from the capital visiting the county seat during a meeting called to define the states intention we had some major changes. The employee was reassigned awaiting retirement and his secretary was require to attend an anger management seminar. I myself alienated the tax office to the point the tax supervisor refused to speak with me and went into her office and shut the door anytime I had the need to go to the tax office. I had the NC state regulation stating what it takes to qualify and I knew I qualified. When initially she stated I did not I told her that a judge would have to tell me that I did not and that she was to carry out the laws of the state and that she did not have the authority to alter the states regulations. Other than her refusal to speak to me, I get along fine now with the tax office. Additional, even without a survey you should be able to get an attorney with some gray around the temples to combine the two tracts into one and to record your two properties
accordingly. If you intend to own the property for a length of time the effort would be justifiable IMO.

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Agmantoo
If they can do it,
you know you can!

Thanks, Agmantoo. There is a bureaucratic process that does not require a lawyer to join the two parcels. I talked to the surveyor. For a flat $250 he will reprint the survey with the common boundary line removed plus do paperwork required. I have been procrastinating on doing this because of other related factors.