Keith N. Alexander, RES, MAS, CFE
The agricultural classification is applied to good faith commercial agricultural properties.
Per Florida Statute 193.461, “…only lands that are used primarily for bona fide agricultural purposes shall be classified agricultural.” This includes but is not limited to:
- Pisciculture, if the land is used principally for the production of tropical fish
- Aquaculture, including algaculture
- Sod farming
- All forms of farm products and farm production.
Agriculturally classified lands are assessed based on an agricultural use rate instead of the market value. There is a specific agricultural use rate for each use category based on the net income attributable to the land from the commercial agricultural business operation.
The agricultural classification typically results in tax savings. However, that is not always the case. Parcels with low land-to-value ratios and/or significant existing cap savings may not see a decrease in taxes from the classification. In some cases, the classification may result in an increase in taxable value.
You may apply for an agricultural classification if your property is used for a bona fide commercial agricultural purpose.
If you are the owner of record on January 1 and a commercial agricultural business is in operation on the property, you may apply for this classification by submitting an application between January 1 and March 1.
Along with the completed application, please include supporting documentation verifying the commercial nature of the agricultural use. Applications may be submitted:
- In person
- By mail to our office at the address listed on the form
- Or via email to firstname.lastname@example.org
When we receive applications via email, we will reply to confirm receipt. If you do not get a confirmation email, contact the Agricultural Department at 561.355-4577.
You will be notified of the status of your application around July 1. If your application is approved, it is not necessary to reapply each year. If there is a change in the use type or acreage used, you must notify our office.
If your agricultural classification application is denied and you disagree, please call our office. An informal conference gives you the opportunity to discuss the basis of the denial with the appraiser and provide any new information.
You are also entitled to file a petition with the Value Adjustment Board. You have 30 days from the mailing of the denial notice to file a petition.
You may receive the agricultural classification and retain a homestead exemption on your property. The portion of your property consisting of the residence and associated curtilage is assessed separately.
The agriculturally classified lands are excluded from the homestead exemption and not protected by the 3% cap. In cases involving long-term property ownership, it is typically more beneficial to forego the agricultural classification in order to protect the property from future assessment increases.
If your property has a homestead exemption and the agricultural business includes structures on site such as a barn, storage building, etc., all or a portion the value of those structures may be recaptured into the assessment if the underlying land is granted the agricultural classification. This is because agricultural land is considered a commercial use and no longer falls under the homesteaded portion of the parcel.
The classification is for parcels with bona fide agricultural activity on site. Bona fide agriculture is defined as good faith commercial agriculture. There must be a reasonable expectation of producing a profit for the property owner and supporting documentation must be provided to verify the commercial agricultural use of the property.
If the prior owner qualified in good faith for the agricultural classification as of January 1, it will stay on the property for the remainder of the current tax year. However, a new owner will have to reapply for the following year.
The window to apply for the agricultural classification is January 1 to March 1. To qualify, bona fide agricultural activity must be the primary use of the land as of January 1 in the year you apply. You must also be the owner of record as of January 1.
Agricultural classification is a benefit available to parcels with bona fide agricultural activity. It is not intended to solely avoid the permitting process. Also, it must be applied for during the application window. If you meet all the requirements for an agricultural classification, there are a few important statutes (FS 604.50 & FS 823.14) that do provide certain protections and waivers to parcels being used for bona fide agriculture.
The agricultural classification is not an exemption; it is a reclassification of the land. Instead of removing a fixed number of dollars from the assessed value, the classification changes the way qualified land is valued.
When all or a portion of a parcel qualifies, the market value of the agriculturally-classified acreage is removed from the subject’s total market value. The value of the remainder plus the agricultural rate becomes the parcel’s new assessment.
If the existing assessment (prior to qualifying for an agricultural classification) was lower than the assessment adjusted for the agricultural classification, the existing assessment remains and the agricultural rate is simply added to that assessed value, resulting in an increased assessment and higher taxes in most cases. That is why the classification is not always suitable for parcels with large cap savings or high structure-to-land-value ratios.
If a homesteaded property qualifies for the agricultural classification, any structures that are part of the agricultural operation (barns, arenas, storage structures, etc.) will be moved from the homestead value cap (3%) to the non-homestead cap (10%). In most cases, this will result in some recapture of the structure’s value, which is added to the ag-adjusted assessment.
Agriculturally-classified land is assessed based on the income potential of the qualifying agricultural use, not the open market value. That per-acre value is the agricultural rate.
Bona fide farmers look to maximize the land. Anyone applying for an agricultural classification should be attempting to do so. We look to see that the property use meets the industry standards. The property appraiser does not set these standards but merely observes and applies them to the agricultural classification approval process.
Some common industry standards for livestock are as follows:
- Grazing/Pasture: One animal unit per 2 acres of healthy pasture. An adult full-sized cow equals one animal unit (1,000+ lbs.).
- Goats/Sheep/Pigs: 5 full sized animals per acre.
- Equestrian (Horses): 2 full sized animals per acre.
- Chickens: 100 per acre.
All grazing animals must have access to any acreage granted the classification. To qualify for pasture, the land must have grass or suitable grazing vegetation. Regardless of parcel size, livestock operations must have 2 or more animals on site to be considered for qualification.
Therefore, an applicant for cattle grazing (full-sized cattle) must have at least four acres of pasture land to qualify.
Equestrian facilities may have some training or special-purpose areas that can be granted without meeting the 2-horse-per-acre standard.
- Apiculture (Bees): A typical bee property in Palm Beach is a storage lease. For those, the industry standard is 24 hives per acre.
- Row Crop/Nursery/Orchard/Sod: Area in use. Qualifying acreage is directly used for growing of the applicable product or provides critical support for the growing operation.
Please note that the industry standards are guidelines and each agricultural operation is unique. The Property Appraiser’s Office cannot guarantee approval based solely on the information above. We must review all parcels applying for an agricultural classification to determine if they qualify based on Florida statutes, Department of Revenue rules, and county ordinances.
The portion of the parcel dedicated to agricultural production is eligible to be reclassified.
For uses like nurseries and row crops, that is generally the footprint of the planted area or portion used primarily for saleable agricultural products. Other uses, such as livestock or apiculture (bees) depend on the size and scope of the operation.
We follow industry standards to determine how much land is necessary for each use.
Florida statues allow us to accept late applications, if the applicant provides evidence “that demonstrates that the applicant was unable to apply for the classification in a timely manner or that otherwise demonstrates extenuating circumstances that warrant the granting of the classification…” FS 196.461(3)(a).
Late applications must be submitted on or before the July 1 notification deadline. (July 1 is when we announce approvals and denials of the classification.) Beyond that date, in most cases, a petition must be filed with the Value Adjustment Board to be considered for the classification.