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