By Katelyn Walley, Farm Business Management Specialist

Farming comes with plenty of challenges, and property taxes is a pretty big one of them. In New York, the Agricultural Assessment Program helps lower property taxes for land used for farming. Every year, if you own or rent farmland, this program can save you money. Here's what you need to know to take advantage of this benefit AND connect with rented landowners to ensure they're receiving this benefit.

What's the Point?

The Agricultural Assessment Program provides a route for reduced property tax bills for land in agricultural production. Land included in an ag assessment is taxed based on the land's agricultural value rather than the full market value. This helps lessen the tax burden of farming which is a land heavy activity. It is also a great tool for rental negotiations as non-operating landowners can receive the tax benefits without owning a farm of their own.

Who Qualifies?

In general, to be eligible for Ag Assessment, farms must be at least 7 acres in size and generate at least $10,000 in annual sales of agricultural products for the preceding 2 years. Some things to note:

• The $10,000 in sales of agricultural products is SALES not PROFIT.
• The qualifying value is also AVERAGED over the preceding two years - so you may still qualify even if you have a year under $10,000.
• If the farm is LESS THAN 7 acres, it can still generally qualify with more than $50,000 in annual sales (greenhouses, nurseries, etc.).
• Commercial Horse Boarding can qualify if there are at least 10 horses boarded and the operation earns more than $10,000 annually.
• Beekeeping is limited to 10 acres of eligibility.
• Up to 50 acres of farm woodland can be included if the farm is active in agroforestry efforts.
• Land that also includes processing areas, home residences, or retail areas separate from agricultural production will not be included.
• Beginning farmers can qualify as soon as they have one documented year of more than $10,000 in sales.

Can Rented Land Qualify?

Land rented for agricultural purposes is eligible for an agricultural assessment. As long as the land is associated with a farm business who qualifies, the landowner can apply to receive ag assessment with proof of a 5+ year rental agreement.

What if I Don't Have $10,000 in Sales?

In cases of natural disasters, adverse weather conditions, or farm depopulation due to public health concerns, farms may experience years where they do not reach the minimum sales values required. Cornell Cooperative Extension staff is able to assist in certifying losses with proper farm documentation.

What about Ag Districts?

The Ag Assessment Program is outlined in NYS's 1971 Agricultural Districts Law which was enacted to protect and promote the availability of land for farming purposes. However, it's important to note that Ag Districts and Ag Assessments are two different things! Land that is in an Ag District might not qualify for Ag Assessment. Land that is NOT in an Ag District can still receive Ag Assessment.

How Do I Apply?

The initial application for an Ag Assessment is completed by the landowner. First, visit your county's Soil and Water Conservation District office. For a small fee (typically $20 or so), they will run a Soil Group Worksheet. This classifies your farmland based on soil productivity class and will calculate acreage within each category.

Next, the landowner will complete Form RP-305. This form is available online or through your county's Office of Real Property. Information collected includes contact info, parcel numbers, acreage uses and sales values.  In rental situations, it is helpful for the farmer to assist the landowner with the initial application.

The Soils Worksheet and RP-305 are then submitted to the town assessor or county office of real property. Typically, the annual due date is March 1st, but check on your local requirements.

Do I Have to Apply Annually?

Annual renewals are required but are completed on a simplified application form, RP-305-r. Many county offices and/or town assessors will directly mail these forms annually.

Are There Penalties?

If land that receives an Ag Assessment is removed from agricultural production, the landowner may need to repay the tax savings from the previous 5 - 8 years. Non-use is NOT considered conversation, but actively changing the land use will trigger a penalty. If the land is sold or transferred, the new owners need to be made aware of any previous assessments.

Where can I Learn More Information?

The Agricultural Assessment Program is overseen by New York State Agriculture and Markets and New York State's Department of Taxation and Finance. They have an official fact sheet that is available on their website. Additionally, Cornell Cooperative Extension and Farm Bureau have done multiple fact sheets, webinars, and informational efforts. Reach out and we can help connect you with information!