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Living on Farmland? Cut Your Property Taxes

By Ephrat Livni, Esq. on February 19, 2016 | Last updated on March 21, 2019

Spring is almost here and that is very exciting indeed. No doubt we're all ready for a little warm weather and more light. But spring brings more than a new season. It's also tax time.

This is a time of year when you should be looking for ways to pay the least possible while following the rules. To do this, we seek credits on all different kids of taxes based on who we are and what we do. If you are on farmland, you may find that tax time brings pleasant surprises. Rules vary from state to state but there are certainly places where you can get property tax breaks for farming, according to Hobby Farms.

Raising Crops?

Maybe you're on farmland but you have not been growing anything. Can you still get a break? Well, maybe. Undeveloped land may get tax breaks based on preservation laws in your state.

For example, in Pennsylvania a landowner may use the Clean and Green program, singing a contract with the state to get breaks. The landowner is bound by a seven-year agreement enrolling lands into one of three categories-agriculture, agriculture reserve or forest reserve-which provides significant reductions in property taxes. So if you live in a forest and have a lot of acreage but are not growing anything, your land may qualify for a tax break too.

State to State

Although each state offers different breaks based in part on its terrain and the preoccupations of its citizens, generally speaking there are incentives and exemptions available for farmers nationwide. This is in recognition of the important contribution that farmers make to society.

From coast to coast, there are programs that could lead to significant property tax reductions, whether you have crops or are just caring for land. But you have to find them, and apply, which is one reason why people do not take advantage of all that is available to them.

California reportedly has one of the most successful programs restricting land use to agriculture. Farmers can commit to 10-year contracts that reduce property tax rates by 20 to 75 percent if located in designated areas.

Meanwhile, Michigan offers a "circuit breaker farmland tax program." Farmers can claim an income tax credit to offset the cost of local property taxes.

Consult With Counsel

Whether you live in a city or on a farm, you should talk to an attorney before tackling your taxes. Consulting with counsel will give you new ideas, even if you decide against representation. Get invaluable guidance and help.

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