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New Jersey's Farmland Tax Assessment saves some people a lot of money.
Many NJ taxpayers are up in arms over the reduced taxes paid by some they consider wealthy or connected who happen to benefit from the reduction in real estate taxes when property is classified as farmland.
What's it all about? NJMoneyhelp.com looks at the issue in this post:
Q. What is New Jersey’s classification for a “farm” for real
estate tax purposes? For example, if I start keeping bees on my property, would
that convert my property into a farm? I already have red oak trees on my
property, and because red oaks produce acorns – which are edible – does my
property constitute a “farm?”
— Wanna-be farmer
— Wanna-be farmer
A. We’re guessing you asked that question after it was
revealed that Kevin Corbett, the head of NJ Transit, paid only $19.42 in taxes for five acres of his Mendham
Township property that’s assessed as farmland. He paid $20,609 in taxes in 2018
for the rest of the property, less than one acre, where his home stands.
That’s a big difference.
There are several requirements before your property can be
assessed as a farm.
First, it must be at least five acres, said Neil Becourtney,
a certified public accountant and tax partner with CohnReznick in Holmdel.
The second requirement is that the property must be actively
devoted to agricultural or horticultural use for at least the two
successive years immediately before the tax year for which farmland assessment
is requested, he said.
“Land is considered to be in agricultural use when devoted
to the production for sale of plants or animals useful to man – excluding dogs
– or when the land qualifies under a federal soil conservation program that
makes payments to the owner,” Becourtney said. “Land is in horticultural use
when it is devoted to the production for sale of fruits, vegetables, nursery,
floral, ornamental or greenhouse products, or when the land qualifies under a
federal soil conservation program that makes payments to the owner.”
Land is actively devoted to agricultural use when the amount
of the gross sales of agricultural products produced on such land, together
with soil conservation program payments, and fees received for breeding,
raising, or grazing livestock have averaged at least $1,000 per year during the two-year period
immediately preceding the tax year at issue; or there is clear evidence of
anticipated yearly gross sales, and the other sources noted, of at least $1,000
within a reasonable period, he said.
An application for farmland assessment must generally
be filed on or before August 1 of the year before the tax year for which such
farmland valuation is sought. The assessor can grant an extension of time, up
to and including September 1, if it appears to the director’s satisfaction that
the taxpayer’s failure to file the application form by the August 1 due date
was due to the illness of the taxpayer or to the death of the taxpayer or a
member of the taxpayer’s immediate family, he said.
“In your situation, assuming you meet the acreage test, you
would need to reach the state’s sales threshold from selling acorns and honey
that presumably the bees would be producing in order to obtain the reduced
farmland assessment for your real estate taxes,” Becourtney said.
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow@vested.com
@vestedland
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