Some properties are eligible for reduced assessments through either farm use special assessment or forest special assessment. The guidelines for qualifying for farmland are influenced by zoning. Properties in an Exclusive Farm Use (EFU) zone must be farmed with the intent to make a profit. If these properties are employed in farm activity, and there are annual sales of commodities, the properties may qualify for farm use special assessment.
Properties Zoned Other Than EFU
Properties zoned other than EFU can also qualify for farm assessment using the same guidelines, with two important differences. There are specific sales levels required and the operator must file an Internal Revenue Service (IRS) Schedule F. Sales volumes must be confirmed by the IRS Schedule F or Farm Schedule and said form must be supplied to our office on request. Non-zoned properties must prove that they have met the farm income level 3 of the past 5 years before they are eligible for farm use special assessment.
Property in an EFU zone must have been farmed the prior year to be eligible for the special assessment. Property can also receive a Western Forest Special assessment and this assessment can be granted in any zone that does not prohibit logging. Forestland is identified as being held or used for the predominant purpose of growing and harvesting trees of a marketable species. The property must have at least two acres stocked with at least 200 growing conifer trees per acre. Properties can also qualify based on a formal reforestation plan.
If a property is removed from one of these special assessment programs, a disqualification penalty will be calculated and may be collected. The penalty is basically a 5 year recovery of the tax savings received by being under special assessment. Farm special assessed properties in an EFU zone are subject to a disqualification penalty of up to 10 years. Specific questions regarding these programs should be directed to 541-440-4222.