Unlock the benefits of Florida’s Greenbelt Law: a significant tax incentive for agricultural landowners aimed at fostering the state’s agricultural sector.
KEY TAKEAWAYS
- The Florida Greenbelt Law offers a tax break to agricultural property owners.
- Qualification depends on bona fide agricultural use of the land.
- Application deadlines and documentation requirements vary by county.
- Maintaining the exemption requires annual certification of land use and ownership.
Maximizing Benefits: How The Florida Greenbelt Law Supports Agricultural Property Owners
If you are in agriculture, the Florida Greenbelt Law gives you a tax break on your agricultural property.
This incentive helps to grow your business and give back to the state’s thriving agricultural economy.
If you take advantage of the agricultural exemption, Florida law can put money back in your pocket to develop your business and support your household.
“This is a great tax break for agribusinesses in Florida. Be sure to check your local property appraiser’s website to see what documents they may require, as it varies across counties. The more documents you have to showcase your agricultural purpose, the better. Inform your local property appraiser of any change in use and just remember that this tax break doesn’t automatically entitle you to any other agriculture benefits at the state or federal level.”
Agribusiness Attorney, Kara Groves
What Is The Agricultural Exemption In Florida?
The tax exemption agricultural property owners in Florida can enjoy changes the way property appraisers value an owner’s property.
An agricultural classification when appraising property can lower the amount of taxes you owe on your property by lowering your property’s assessed value.
Florida provides this tax incentive to protect and develop its agricultural lands.
Florida’s Greenbelt Law
Florida’s Greenbelt Law, also known as an agricultural classification or exemption, is a tax incentive program designed to reduce the property tax burden on land used for agricultural purposes. The law aims to preserve farmland and promote agricultural production by providing property tax relief to qualifying landowners. It allows the assessment of eligible agrarian land at its agricultural use value rather than its fair market value for property tax purposes, resulting in significantly lower property taxes for land used for bona fide agricultural purposes. To qualify for the Greenbelt Law, landowners must meet specific criteria listed below.
Benefits of the Greenbelt Law
Landowners who qualify for the Greenbelt Law in Florida can benefit in several ways. Firstly, they can enjoy lower property tax assessments because their land is assessed at its agricultural use value rather than its market value. That means property owners can pay taxes on the value of the land as it is used for agricultural purposes, which is typically lower than its potential market value if used for development or other purposes. Reduced property tax bills can make agricultural operations more economically viable. Landowners can allocate more resources to their agricultural activities by paying lower property taxes, such as purchasing equipment, seeds, or livestock or investing in infrastructure improvements. Finally, the Greenbelt Law can minimize sudden rises in property taxes due to increasing land values in urbanizing areas. This protection is valuable as it helps to stabilize the costs associated with owning and operating agricultural land, allowing farmers and ranchers to plan their finances more effectively over the long term.
HOW DOES FLORIDA NORMALLY VALUE PROPERTY TO DETERMINE PROPERTY TAXES?
Florida normally assesses property value by calculating the property’s market value. Market value is also known as just value. Just valuation of property under Florida law includes many factors such as:
- The present cash value of the property, or the amount a willing purchaser would pay a willing seller;
- The highest and best use the property could achieve;
- The location of the property;
- The size of the property;
- The cost of the property;
- The condition of the property;
- The income derived from the property; and
- The net proceeds from sale of the property.
The appraiser uses the assessed value to calculate your property tax liability.
In many cases, the most lucrative use of Florida property is the development of residential and commercial buildings.
You should not have to pay higher taxes associated with commercial and residential building development if you seek to develop natural resources on your property.
HOW DOES FLORIDA VALUE AGRICULTURAL PROPERTY TO DETERMINE PROPERTY TAXES?
The Florida agricultural tax exemption assesses the value of qualifying property by the value of the property’s use. The only factors the appraiser can use to assess the value of commercial agricultural property are:
- The property’s quantity and size;
- The property’s condition;
- The property’s market value as agricultural land;
- The income the property produces;
- The present productivity of the land;
- The commercial viability of the agricultural product; and
- Other applicable agricultural factors reflective of standard, present agricultural practices.
Florida boasts an impressive share of the United States’ agricultural economy, and you have many options for making your land eligible for an agricultural tax exemption.
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HOW TO GET AN AGRICULTURAL EXEMPTION IN FLORIDA
To get an agricultural tax exemption in Florida, your land must qualify under the applicable statute, and you must submit paperwork by the appropriate deadlines.
WHO IS ELIGIBLE FOR A GREENBELT LAW EXEMPTION IN FLORIDA?
You can receive a Greenbelt Law exemption if you primarily use your land for bona fide agricultural purposes.
Bona fide agricultural purposes are good faith commercial agricultural uses of your land. Factors that determine whether you primarily use your land for bona fide agricultural purposes include:
- The length of time you have used the land for commercial agricultural purposes;
- The continuity of your commercial agricultural use;
- The purchase price paid for the land;
- The size of the land in relation to agricultural use;
- The efforts you have made to care sufficiently and adequately for the land according to commercial agricultural standards; and
- The terms and conditions of any leasing agreements covering the land.
While this list of factors is a good starting point to determine your eligibility for an exemption, they are not one size fits all. These factors change depending on the kind of agriculture you perform on your land, and an experienced agribusiness attorney can determine what your unique agricultural business needs to qualify.
WHAT IS THE PROCEDURE TO OBTAIN AN AGRICULTURAL EXEMPTION IN FLORIDA?
Florida agricultural exemption requirements include multiple applications you must complete and multiple deadlines you must follow.
Your land must be eligible for exemption by January 1 of any year in which you plan to apply for exemption.
Once your land is eligible, you have until March 1 to apply for an agricultural exemption.
The appraiser may ask you for additional information to prove bona fide agricultural use before granting or denying your application.
If you lease your property for agricultural purposes, the leaseholder can apply for exemption on your behalf if they include the lease and if the lease or an affidavit from you proves you authorized their actions.
Failure to apply by March 1 means you waive your right to an exemption for a year. If you can prove extenuating circumstances that prevented you from applying on time, you have 25 days after the appraiser mails their notice of property assessment to petition the appraiser for exemption.
If an appraiser denies exemption because they claim you lack sufficient evidence, you have 25 days from the mailing of their property assessment notice to make a petition for exemption to the value adjustment board. You must pay $15 to petition the value adjustment board.
WHAT IS THE PROCEDURE TO MAINTAIN AN AGRICULTURAL EXEMPTION IN FLORIDA?
After the appraiser grants you an agricultural exemption, you must annually certify whether or not ownership and/or use of the land has changed.
Your agricultural exemption renews on a yearly basis until ownership or use changes.
On January 31 of each year, the appraiser sends you notice of your exemption and a reminder to send certification regarding ownership and use.
How Much Does a Greenbelt Exemption Save?
The amount of money saved by meeting Florida’s Greenbelt requirements can vary widely depending on several factors, including the size and location of the property, the property’s market value, and the specific tax rates in the area. However, the savings can be substantial for qualifying landowners. Under the Greenbelt Law, qualifying agricultural land is assessed at its agricultural use value rather than market value. The agricultural use value is typically lower than the market value, resulting in lower property tax assessments.
Example Calculation
Suppose a piece of land has a market value of $500,000 but an agricultural use value of $200,000 due to its classification under the Greenbelt Law. If the property tax rate is 1.5%, the tax bill would be $7,500 based on the market value ($500,000 * 1.5%). However, if assessed at the agricultural use value, the tax bill would be $3,000 ($200,000 * 1.5%), saving $4,500 annually.
- Cumulative savings. Over time, these savings can accumulate significantly. For a property assessed at a market value of $500,000, the cumulative savings over ten years could amount to $45,000, assuming the tax rates and property values remain constant.
- Varied Savings. A landowner’s savings can vary based on factors such as changes in property values, updates to tax rates, and modifications to the Greenbelt Law. Additionally, properties with higher market values and tax rates may see even more significant savings.
Ultimately, Florida’s Greenbelt Law can lead to substantial savings for qualifying landowners by allowing their property to be assessed at its agricultural use value, resulting in lower property tax bills than assessments based on market value.
Greenbelt Assessment
A Greenbelt Assessment determines eligible agricultural land in Florida for property tax purposes under the Greenbelt Law. This assessment determines the value of the land based on its actual use for agricultural purposes rather than its potential market value for development or other non-agricultural uses. Here’s how the assessment works:
- Assessment criteria. A Greenbelt Assessment considers factors such as the size and location of the property, the type of agricultural use, and the income generated from agricultural activities.
- Agricultural use value. The assessment values the land at its agricultural use value, which is typically lower than its fair market value, reflecting the land’s income potential when used for agricultural purposes.
- Annual documentation. To maintain an agricultural classification and the Greenbelt Assessment, landowners must submit annual documentation to the property appraiser’s office, demonstrating that the land is being used for agricultural purposes.
- Property inspection. Property appraisers may conduct periodic inspections to verify that the land is being used for agricultural activities and meets the requirements for the Greenbelt Assessment.
- Tax savings. The Greenbelt Assessment results in lower property tax assessments for qualifying agricultural land, as landowners pay taxes based on the agricultural use value rather than the market value.
Overall, a Greenbelt Assessment is a crucial component of Florida’s Greenbelt Law, providing property tax relief to landowners who use their land for agricultural purposes and helping to preserve farmland in the state. Online calculators can be a helpful tool for estimating potential property tax savings under Florida’s Greenbelt Law. However, it may not account for all factors specific to your situation, so it’s wise to seek legal help if you have any questions or concerns.
WHAT IF I LIVE ON MY AGRICULTURAL PROPERTY?
If you have a residence on your commercial agricultural property, you can still qualify for the exemption. The appraiser excludes the portion of your property containing a residence and its curtilage from the agricultural property.
The appraiser uses just valuation to assess the value of the property containing your residence and its curtilage. The portion of your property containing a residence can receive a homestead exemption.
Other Considerations
Florida’s Greenbelt Law offers significant tax benefits for agricultural land, but navigating its requirements requires careful attention to detail. Here are some practical tips for landowners.
Timing of Initial Application and Renewal Applications
Landowners must obtain and maintain their property’s agricultural classification. Application filing should occur promptly and, if denied, appealed promptly. For counties requiring annual renewal, keeping track of renewal dates is crucial.
Selling Land with an Agricultural Classification
Sellers should retain the right to continue agricultural use until closing in purchase contracts to avoid classification denial during the sales process.
Purchasing Land for Agricultural Purposes
Buyers intending agricultural use should file an initial application and ensure ongoing compliance, including passing the physical activity test at closing.
Leasing
Property owners leasing land must consider the agricultural classification. Lease agreements should specify who files initial and renewal applications, require lessee compliance with the physical activity test, and allocate tax payment responsibilities.
Property Use
Early communication with the property appraiser is essential to understand and meet classification criteria. After obtaining the agricultural classification, ensuring continued agricultural use is crucial. Continued use may include maintaining a timber management plan for timberland.
Cessation of Use
If the property is no longer used for agricultural purposes, promptly notifying the appraiser is necessary to avoid back taxes.
CONTACT AN AGRIBUSINESS ATTORNEY TO GIVE YOURSELF THE BEST COMMERCIAL ADVANTAGE
Florida has many laws that can boost your business in extraordinary ways, but it is hard to seize these opportunities without the help of a good agriculture attorney in Florida.
The attorneys at BrewerLong and Groves Law are passionate and highly experienced, and they understand the ins and outs of the agricultural industry. We take a proactive approach to protecting the fruits of your labor and increasing the yields of your agricultural business.
Call us at 407-660-2964 or contact us online for a consultation to protect your land and your labor.
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