Agricultural assessment program: overview

Introduction

The State Legislature enacted the New York Agricultural Districts Law in 1971 to protect and promote the availability of land for farming purposes. Subsequent amendments broadened its scope. The law provides a locally initiated mechanism for creating agricultural districts. Agricultural districts are intended to counteract the impact that nonfarm development can have upon the continuation of farm businesses.

The Agricultural Districts Law allows reduced property tax bills for land in agricultural production by limiting the property tax assessment of such land to its prescribed agricultural assessment value. Owners whose land satisfies the eligibility requirements may apply for an agricultural assessment (see details below).

Agricultural districts also provide the framework to:

limit unreasonable local regulation on farm practices
modify public agencies' ability to acquire farmland through eminent domain
modify the right to advance public funds to construct facilities that encourage development
require state agencies to modify administrative regulations and procedures to encourage continuing farm businesses, and
provide Right to Farm provisions for protection from private nuisance suits for land in agricultural districts and parcels receiving agricultural assessments outside districts

Benefit assessment, special ad valorem levies, or other rates and fees for the finance of improvements such as water, sewer or nonfarm drainage may not be imposed upon land used in agricultural production and within an agricultural district unless such charges were imposed prior to forming the agricultural district.

You must apply to receive an agricultural assessment

You must file Form RP-305, Agricultural Assessment Application or Form RP-305-r, Agricultural Assessment Application Renewal with the assessor to receive an agricultural assessment for your parcels. You must apply for an agricultural assessment, and the farmland must satisfy certain gross sales and acreage eligibility requirements.

Land outside an agricultural district

Land outside an agricultural district may qualify for an agricultural assessment. The requirements and application procedure are the same. However, land located outside an established agricultural district that receives an agricultural assessment is required to remain in agricultural use for eight years (land within an agricultural district is encumbered for five years) or be subject to a payment for conversion to non-agricultural use.

Eligibility requirements

The assessor or board of assessors determines eligibility. If your application is denied, you have the right to administrative review by the board of assessment review.

Land generally must consist of seven or more acres that were used in the preceding two years for the production for sale of crops, livestock, or livestock products.

The annual gross sales of agricultural products generally must average $10,000 or more for the preceding two years. If an agricultural enterprise is less than seven acres, it may quality if average annual gross sales equal $50,000 or more. (see Rented land and Exceptions to gross sales requirements.) Land that supports a commercial horse boarding operation may qualify for an agricultural assessment if the following eligibility requirements are met:
- at least seven acres of land supports the commercial horse boarding operation;
- the operation boards at least 10 horses regardless of ownership; and
- the operation receives $10,000 or more in gross receipts annually in the preceding two years from fees generated through boarding horses and/or through producing sale of crops, livestock, and livestock products. (If the primary onsite function is horseracing, the land is not eligible.)
A start-up operation may qualify based on its annual gross sales of agricultural products in the operation's first or second year. Such annual sales must amount to at least $10,000, if the start-up operation has seven or more acres, or to at least $50,000, if the start-up operation has less than seven acres in agricultural production.
A start-up commercial horse boarding operation may also qualify based on annual boarding fees of $10,000 or more in its first or second year.

Land included in agricultural assessments

Agricultural assessments are limited to land used in agricultural production, including cropland, pasture, orchards, vineyards, sugarbush, land used to grow Christmas trees, support land, and crop acreage either set aside or retired under federal supply management or soil conservation programs. Up to 50 acres of farm woodland is eligible for an agricultural assessment per eligible tax parcel. Land and water used for aquacultural production are eligible, as is land under a structure within which crops, livestock or livestock products are produced. Land associated with the owner's residence is ineligible.

Multiple land parcels

Since farm operations often encompass more than one parcel, eligibility is determined by combining separately assessed parcels that are farmed together as a single operation. However, you must submit a separate application for each separately assessed parcel. A single operation is one distinct agricultural business enterprise.

Rented land

Land rented for agricultural purposes may receive an agricultural assessment. If the rented land satisfies the basic eligibility requirements described above, it is eligible for an agricultural assessment. In addition, if the rented land does not satisfy the average gross sales value requirement, but does satisfy the other requirements, it may still be eligible if it is farmed, under a written rental agreement of at least five years, with other farmland that satisfies all eligibility requirements. The applicant must substantiate the existence of the term of the rental agreement by providing the assessor with either a copy of the lease or Form RP-305-c, Agricultural Assessment Written Lease Affidavit for Rented Land. A start-up farm operation may include rented land.

Gross sales value

Gross sales value means the actual proceeds from sales of agricultural products. The landowner must adequately document sales for the assessor. Proceeds from all parcels used in a single operation may be combined to satisfy the average gross sales value requirement. If a crop is grown and processed on the farm, the value of the crop before processing must be used when computing its average gross sales value. When farm woodland is eligible, proceeds from the sale of woodland products may be included in the computation of average gross sales value up to a maximum of $2,000. Commercial horse boarding receipts can be generated through the boarding of horses or though the production for sale of crops, livestock, and livestock products, or both.

Exceptions to the gross sales requirement

Agricultural lands affected by natural disasters or adverse weather conditions may continue to be eligible. County Cornell Cooperative Extension staff must certify such natural disaster or weather condition destroyed the agricultural production and, as a result, the average gross sales value for the preceding two years was less than the minimum required for eligibility. You must document the extent of damage and the gross sales value the land can produce under normal conditions. Use Form RP-305-b, Application for Exception From Minimum Average Sales Value Requirement.

There is no minimum gross sales value required for crop acreage either set aside or retired under federal supply management or soil conservation programs.

Agricultural assessments and buildings

Agricultural assessments apply only to land and any posts, wires, and trellises used to support vines or trees for the production of fruit on eligible land. The program does not apply to farm buildings, residences, and other improvements. Farm buildings and structures may qualify for a separate exemption; see farm building exemptions for details. However, land under farm buildings and structures that produce qualified crops, livestock, or livestock products may under certain circumstances receive an agricultural assessment.

The application procedure

The first step to apply for an agricultural assessment is to visit the county Soil and Water Conservation District office. A technician will classify all farmland to be enrolled in the program by soil productivity. They will plot each parcel of the farm on a soil map and calculate the acreage in each soil group. You should work with the technician to outline woodland areas and ineligible areas. You may exclude any area from the program, and this area should be clearly defined and marked on the map. The technician will record the information on Form APD-1, Soil Group Worksheet.

You should transfer the soil information to Form RP-305, Agricultural Assessment Application, and indicate any farm woodland on the parcel. The landowner submits the completed Form RP-305 along with copies of the completed APD-1 soil group worksheet and the soil map to the assessor by Taxable Status Date.

In most towns, the Taxable Status Date is March 1, but you should confirm this with the assessor. You must file an application each year. After the initial application, a short version may be used if there have been no changes since the previous year's application. See Form RP-305-r, Agricultural Assessment Renewal Certification.

Amount of assessment reduction

After deciding whether the parcel—or any part of it—is eligible for an agricultural assessment, the assessor calculates the assessment by multiplying the acreage in each soil group and farm woodland by the applicable agricultural assessment value. The sum of the values is multiplied by the municipality's latest state equalization rate or special equalization rate. The resulting figure is the agricultural assessment for the eligible land on the parcel. This amount is compared to the assessed value of the eligible land. Any assessed value above the agricultural assessment is exempt from real property taxation. In other words, taxes on eligible farmland are based on the land's agricultural assessment rather than its full assessment.

Finding out about the status of an application

If you include a self-addressed, stamped envelope with the application, the assessor will notify you of the approval, modification, or denial of the application at least ten days before the date for hearing assessment complaints, which in most towns is the fourth Tuesday in May. If an application is denied, the assessor must also state the reason on the form. For approved applications, the assessor must show how the total assessed value is apportioned between the eligible and ineligible parts of the property for the current year and prior year. You may request that the municipal or school tax collector disclose the dollar value of reduction in tax liability attributable to lands receiving an agricultural assessment.

Farmland that is taken out of agricultural production

If farmland that has received an agricultural assessment is converted to a nonagricultural use (within five years of last receiving an agricultural assessment if located in an agricultural district and within eight years if located outside an agricultural district), a payment to recapture the taxes forgone for converting such land will be imposed.

The assessor determines whether a conversion has occurred on the basis of the facts of each case. Conversion is defined as an outward or affirmative act changing the use of agricultural land. Non-use of the property (for example, abandoning land or leaving it idle) disqualifies such land from receiving an agricultural assessment, but is not considered a conversion. Similarly, the following circumstances where land is converted to a nonagricultural use are not eligible for an agricultural assessment but are not subject to a payment for conversion:

oil and gas exploration or extraction
eminent domain
the purchase of land or the conveyance of a conservation easement to protect the New York City Watershed
other involuntary proceedings (except a tax sale)

Payments for the conversion of agricultural land to a nonagricultural use are added to the taxes levied upon the land so converted. The property may be subject to a tax sale should such payment remain unpaid. Therefore, these payments generally become the responsibility of the owner of the land at the time of conversion.

A payment for conversion will be equal to five times the taxes saved in the most recent year that the land received an agricultural assessment. In addition, interest of 6 percent per year compounded annually will be added to the payment amount for each year that the land received an agricultural assessment, not exceeding five years. When only a portion of a parcel is converted, the assessor apportions the assessment and the agricultural assessment and determines the tax savings attributable to the converted portion. The payment for conversion of the portion of the parcel is then computed.

90 Day Notice: Whenever a conversion occurs, the landowner shall notify the assessor within 90 days. Failure to notify may result in a penalty of two times the payments owed to a maximum of $1,000.

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Updated: January 8, 2025