Start farming or see 1000% increase in property tax!

[MossRoad]

We received a tax assessment notice last spring that showed a 1000+% increase on the two parcels of land next to the house. These are mostly hardwood and pine, hilly acres that can not be tilled. At one time they were partially fenced for cattle. I wrote an appeal stating that nothing had changed in the land use or in the surrounding property for may years. However, the county doesn't think my owning a tractor and implements qualifies for agricultural status and have re-classified it residential. Just got a call from the county guy processing the appeal requests. I freely admitted that I haven't sold any produce in several years and I turned my hay fields into prairie grass (at the urging of the DNR). It seems my options are to declare it a "classified forest" with the DNR (Department of Natural Resources) or starting some sort of farming activity. The classified forest option is a one-way event. Do something with the land later and you owe the back taxes. So I need to start some sort of agricultural endeavor.

I could sell timber, but not sure I want to do that, although I'll look into it. My wife has suggested growing mushrooms, which she has been after me to do. I've sold all my hay making equipment and only had about 5 acres anyway. The county guy couldn't give me a legal definition for "agricultural activity" but assume it just means I need to be selling something produced on/from the land.

Add in the fact that I'm retired and don't want to start a second career, I need so creative thinking here. Thoughts and ideas appreciated. I've got 2 weeks to come up with a plan.

Thanks,

Here's what you do.
Put the land into a classified forest/wildlife habitat. That will keep the tax base at agricultural, while you only pay $1.00 of actual tax per acre on that land. Then, PAY YOURSELF THE ACTUAL AGRICULTURAL TAX RATE FOR TEN YEARS and never spend that chunk. That way, if you ever do decide to take it out of the classified program, you already have the back taxes saved. It won't be a shocker and it won't be unfair. Also, if you put it into the classified program and later decide to give/sell the place to your son, as long as he keeps it in the program, there is no penalty. If he takes it out, you have the money to pay the back taxes already saved up. Its a good program if you don't want to farm it ever again. And if you do, this may be an easy way to deal with the minor taxes you'd owe.

The beauty of the program is you can still timber the land, hunt, fish, ride horses, make trails, etc.... you get free advice from a state forester. Heck, you can make maple syrup and sell it. Its good forest management.

Good luck.

 

[powerpace]

What is the current tax and what would the increase be?

 

[randy41]

here to get ag use classification for your land for tax purposes requires farm gross income of at least $1000. the county checks every year and asks you to reaffirm the ag use. if you don't report the income on your tax return then you would be obviously cheating somewhere, that is either lying to the county about the use of the land or lying to the IRS about your income. i think the taxes without the ag discount is in the $1600 range and with the discount it is about $600 less for me.

 

[Stick895]

We've, now just me, have had land in Chesterfield that's mostly wooded since 1965. It's been in the land use classification, with a forestry stewardship plan drawn up by the state forestry dept. The zoning in the area is agricultural. We haven't farmed it and I'm only just now trying to sell some timber off of it. taxes and the land use have never been an issue, so I don't know what Indianas problem is. But I do know that Chesterfield isn't so much interested in developing land, so they don't want to put people in the position of having to sell their land to someone because of taxes.

 

[sfloggie]

Barry,

We had the same issue and Land Use Tax deduction was our way to go. There were five things to do to qualify and it could be one, a few or all. The solution was for us was to ask a local farmer to farm our land for free in exchange for land management, advice and assistance. We got our farm number from the local USDA Office and he also provides that number for a crosscheck. We fill out paperwork each year. They do no till growth of either corn or soybeans.

State law

I also qualified under Timber Management as I continue to clear low growth around the pine and hardwoods to allow them room to grow. Lastly we qualified under Open Space.
There are Roll-back taxes if we reduce any acreage or if we sell and they do not continue. Jim

 

[MossRoad]

Its intersting to me because, like the O.P., I live in Indiana, only up north in a different county. Our land was originally zoned AG, was split up in an estate, and sold as a buildable lot, but remains AG until we build on it. I have a farm number. We had part of it forested back around 1990 following a state forester's plan. I never put it in the classified forest/wildlife habitat program and our taxes have almost doubled over the last two decades, however, by doubling, I mean they went from about a hundred bucks to about two hundred bucks, so I'm not making any waves down at the court house any time soon.

Perhaps the O.P.s land is attached to a home site, which changes things drastically. Would like to hear more details of his property, etc... for curiosity.

 

[MotorSeven]

I think a few cattle on it is the easiest thing to maintain. Besides the price of beef is up and is likely to stay there a few years since overall beef numbers are down nationwide.

 

[lhfarm]

Its intersting to me because, like the O.P., I live in Indiana, only up north in a different county. Our land was originally zoned AG, was split up in an estate, and sold as a buildable lot, but remains AG until we build on it. I have a farm number. We had part of it forested back around 1990 following a state forester's plan. I never put it in the classified forest/wildlife habitat program and our taxes have almost doubled over the last two decades, however, by doubling, I mean they went from about a hundred bucks to about two hundred bucks, so I'm not making any waves down at the court house any time soon.

Perhaps the O.P.s land is attached to a home site, which changes things drastically. Would like to hear more details of his property, etc... for curiosity.

The land had been part of a large farm that was split up among the sons, including my late FIL. Over the years, all the brothers sold their shares and my FIL purchased parts of the original farm in the 60s. So the land is in three sections; the house and barn are on one 11 acre section and the remaining 43 acres, the ones in question, are in two parcels.

Since posting, I've been in contact with the Purdue Ag Extension. They have given me some helpful advice, including suggesting I contact the country planning board to see if they or the assessor are responsible for use or zoning changes and what they know about the change in status of our land. Haven't heard back yet, but I'll let you know what happens.

 

[MossRoad]

The land had been part of a large farm that was split up among the sons, including my late FIL. Over the years, all the brothers sold their shares and my FIL purchased parts of the original farm in the 60s. So the land is in three sections; the house and barn are on one 11 acre section and the remaining 43 acres, the ones in question, are in two parcels.

Since posting, I've been in contact with the Purdue Ag Extension. They have given me some helpful advice, including suggesting I contact the country planning board to see if they or the assessor are responsible for use or zoning changes and what they know about the change in status of our land. Haven't heard back yet, but I'll let you know what happens.

Good luck to you. Up here in St. Joseph County, they are pretty agressive about keeping farm land as farm land. You can't sell anything less than 20 acres if it doesn't have at least 600' of road frontage unless it was subdivided long ago. Its very hard to cut off chunks for houses, small lots, etc... We had to go through a zoning process because our parcel was 19.9 acres +-. I've heard very little about anyone's farm land getting tossed into residential in this county. We once attempted to purchase 40 acres but it only had 100' of road frontage, a 100' wide lane a quarter mile back, then opened to a 40 acre square. They denied us our variance. Of course, the next year, they granted the same variance on the same parcel to a politicians relative, sooooo.... its who you know not what you know. I was happy to see an industrial chicken farm pop up right behind them soon thereafter. :laughing:

 

[deezler]

South of stewart and north of grandview! haha, that was a fun map challenge to find your place. Looks like a truly beautiful spot. How are your views?

I spent an evening boating on grandview a few years back with some crazy cummins engineers, good times.

Best of luck in your land classification efforts. I think you're headed in the right direction.