Easiest path to an Ag Exemption?

[trackman23]

I am in central NC and I am getting ready to move into our new house on 17-acres. Most of that land is wooded and within the woods are a good bit of streams, wetlands and riparian buffers so my "usable" land is probably more like 12-13 acres with 2-acres already cleared and formerly used to grow a variety of crops over the years. I would love to have a small, agricultural business as a hobby and as a way to get my ag exemption so that I don't have to ask permission and deal with county inspectors to build barns, sheds, shops, etc on my land. I don't think I have enough land for a forestry program so I think I need to cultivate some crops or deal with bare-root plant potting / growing like a small nursery grower.

I really have no idea on what options I have for crops, flowers, mushrooms, nursery growing, etc and I also have no idea which ones are the most efficient from a land use stand point. If there are any suggestions from the group here as to where to even start it will be greatly appreciated.

Thanks!

 

[BAP]

A world wide forum is the wrong place to ask this question because Ag exemptions are a local and state thing. Not every state or locality has or recognizes such thing. Even if they do, it’s highly doubtful that it’s going to be the complete Free Pass to do anything you want like you want to. Best bet for the answers you want is to talk some neighboring farmers to see what they have to do to comply with a Ag Exemption or what they even have for an exemption. Most things like exemptions or similar things require frequent renewal and/or inspections by officials to ensure that you meet the requirements and are doing what you are supposed to be doing with that exemption. It’s usually not a free for all pass.

 

[GreensvilleJay]

As BAP says, 'differnet lands, different laws'......
Talk to local county 'ag rep' or whatever 'they' call the guy who deals with the local land,farms and farmers. Farm equipment dealer should be able to point you to the right building .

 

[fried1765]

I am in central NC and I am getting ready to move into our new house on 17-acres. Most of that land is wooded and within the woods are a good bit of streams, wetlands and riparian buffers so my "usable" land is probably more like 12-13 acres with 2-acres already cleared and formerly used to grow a variety of crops over the years. I would love to have a small, agricultural business as a hobby and as a way to get my ag exemption so that I don't have to ask permission and deal with county inspectors to build barns, sheds, shops, etc on my land. I don't think I have enough land for a forestry program so I think I need to cultivate some crops or deal with bare-root plant potting / growing like a small nursery grower.

I really have no idea on what options I have for crops, flowers, mushrooms, nursery growing, etc and I also have no idea which ones are the most efficient from a land use stand point. If there are any suggestions from the group here as to where to even start it will be greatly appreciated.

Thanks!

You might want to consider a small (21' x 50' ) plastic covered hoop greenhouse.
Great for growing small plants to sell, and a very compact way of producing income.

 

[D2Cat]

Years back we bought 3 acres behind the 3 acres our home is on just so another home wouldn't be there. We made a Christmas tree farm there. Planted pine trees, 6' apart and rows 6' apart. Ending up selling most of the trees to a nursery.

I don't remember doing anything specific for an exception, the county appraiser had to take a look I'm sure.

 

[PoTreeBoy]

I am in central NC and I am getting ready to move into our new house on 17-acres. Most of that land is wooded and within the woods are a good bit of streams, wetlands and riparian buffers so my "usable" land is probably more like 12-13 acres with 2-acres already cleared and formerly used to grow a variety of crops over the years. I would love to have a small, agricultural business as a hobby and as a way to get my ag exemption so that I don't have to ask permission and deal with county inspectors to build barns, sheds, shops, etc on my land. I don't think I have enough land for a forestry program so I think I need to cultivate some crops or deal with bare-root plant potting / growing like a small nursery grower.

I really have no idea on what options I have for crops, flowers, mushrooms, nursery growing, etc and I also have no idea which ones are the most efficient from a land use stand point. If there are any suggestions from the group here as to where to even start it will be greatly appreciated.

Thanks!

A quick search found NCDOR. Noodling around, it seems you need a qualifying farmer certificate. Looks to me like you need $10,000/yr of farm income. There's a FAQ section you can study.

Edit: NCL4701's response below is more complete and experience-based. My reference is for sales tax exemption, I think.

 

[NCL4701]

The ag has a pretty low income threshold at only $1,000 gross. I would suggest read over this as a starting point

https://www.ncleg.gov/enactedlegislation/statutes/pdf/bysection/chapter_105/gs_105-277.3.pdf

The actual property tax “exemption”, which is what most people think of when they say ag exemption, is a very easy application through your county property tax dept. It just reduces your property tax. It doesn’t allow you to build buildings without permits. For that you need to make sure your land is zoned correctly (not RS or something that prohibits ag) and if you’re building a shed, etc. check with your county building inspections to find out what requires permits and what doesn’t as that varies by county. My place is zoned ag but I can’t put up anything with a roof without a permit. Some counties, electric service is the permit trigger. If you’re inside city limits the city will have a whole separate layer of regulations to navigate.

You’re correct that you don’t have the 20 acres of timber required for forestry. The “ag exemption” will get you present use v best use property tax treatment but there are penalties for leaving the program so look at those before committing. You may also have some other benefits (farm tags for trucks are a bit cheaper than weighted tags, etc.) but many of the benefits such as being able to buy inputs wholesale rather than retail, writing off expenses to reduce taxable income, etc. have more to do with setting up a business entity and running it as a business with its own EIN instead of running all the money flow under your SSN.

There’s also a wildlife conservancy program. I don’t know much about that one. We’re currently in forestry.

So far as what to grow, there are areas here where that varies from one side of the county to the other and it definitely varies from mountains to coast. Strongly suggest contacting your county Ag Extension office and have a good discussion with them about your goals and options. They’re very helpful and that’s why they’re there. They can (and will if you let them) educate you on local legalities, available programs, and options for generating the $1000/year gross for the ag program if that’s the way you want to go.

If that sounds bad, it really isn’t. Once you decide what you want to do, what programs are available, and get the legal framework set up it isn’t a big deal to run the paperwork/legal side of things.

For example, in my case the property I routinely refer to here as “mine/ours” is mostly owned by a LLC and is in a forestry program. My wife and I own our house and yard which doesn’t qualify for any programs. The stock in the LLC is owned by my brother and me, so I still think of the property as “ours” for the most part. The LLC land is in forestry. LLC files its own tax return. Expenses for maintaining the land and houses owned by the LLC are written off against income. Depreciation on equipment, fuel, rental house repairs: all that reduces income. Setting it up took some research and work but it’s not a big deal at all to run.

Call your county Ag Extension office. And good luck with whatever you decide.

 

[rc51stierhoff]

I’d recommend you check with county extension office or state forester and maybe also local USDA / NRCS folks.

 

[ctfjr]

A lot of good advice above. It is definitely a 'local' thing. I would suggest you also might contact the local tax assessor office.
One of my son's lives in MD. He bought the adjacent 10 acres and was very concerned that it might be rezoned residential. When he spoke to the assessor's office the person there suggested he contact some agency (forestry, conservation, ???) first.
He did. Turned out it was really simple to qualify for a forestry / conservation exemption (whatever it was called). All he had to to was thin out some trees (agent came up and marked them), put in some simple trails and install some specific bird houses. Had years to complete the tasks.
Taxes went to a few $100 on that lot.

 

[DustyRusty]

He might also want to speak with a local accountant to see how it will effect the sale of the home when the time comes, to make sure that he doesn't lose the exemption to the sales profit of a home that you live in for more than 3 years. The tax laws are difficult to determine how they will effect you when you do some activities.

 

[chim]

Here in Lancaster County PA it looks like the properties in excess of 15 acres get a huge tax break. We have 3-1/2 acres and pay several times what "farms" pay. No guarantee that's the same even in another PA county. As mentioned - check locally.

 

[RCW]

All good advice. Check state regs.

For what it is worth, there might/could be exemption options if you lease your property to a qualified agricultural operation.

Example: I have a neighbor Maple Producer tap my trees for sap. He does about 200 taps on our 6+ acres now, so we're about 20% of his operation. Apt to increase next season.

He is a qualified agricultural operation as a dairy farm, vegetable and maple producer.

If I were to have a 5-year lease with him (I don't), my property would also qualify for an agricultural exemption from certain NYS property taxes. I don't believe it would exempt me from building permit requirements, unless obviously related to his ag operation.

I don't have a lease because I don't feel a need with him. Known him since he was in grade school with my own kids.

I also don't have one because I don't trust government programs. Many of these have "claw back" provisions that I don't want to test.....

 

[Russell King]

Look into bee keeping for exemptions.

 

[NCL4701]

All good advice. Check state regs.

For what it is worth, there might/could be exemption options if you lease your property to a qualified agricultural operation.

Example: I have a neighbor Maple Producer tap my trees for sap. He does about 200 taps on our 6+ acres now, so we're about 20% of his operation. Apt to increase next season.

He is a qualified agricultural operation as a dairy farm, vegetable and maple producer.

If I were to have a 5-year lease with him (I don't), my property would also qualify for an agricultural exemption from certain NYS property taxes. I don't believe it would exempt me from building permit requirements, unless obviously related to his ag operation.

I don't have a lease because I don't feel a need with him. Known him since he was in grade school with my own kids.

I also don't have one because I don't trust government programs. Many of these have "claw back" provisions that I don't want to test.....

Good points.

For the present use tax reduction, leasing for ag ops works here so long as it clears the $1000 threshold.

The “claw back” is triggered if you leave the program. It’s the three prior year’s difference between the best use tax amount and actual reduced amount previously paid plus interest at prime rate plus not much. (I forget the precise %). We went through this not long ago when we traded 0.85 acres that was in the forestry program to a developer for 3.4 acres of his land. I got a bill for about $75. For us, we had to be in the program 5 years to break even on the claw back.