Author Topic: Property Tax Benefits with Fruit Tree Farm? (California)  (Read 682 times)

Pouteria_fan

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Property Tax Benefits with Fruit Tree Farm? (California)
« on: December 30, 2022, 12:43:56 PM »
I have heard that in certain states there are significant property tax advantages to having your fruit tree orchard be under some sort agriculture or homestead designation. Has anyone looked into this in California? (Ag Exemption or something similar?)
« Last Edit: December 30, 2022, 12:46:00 PM by Pouteria_fan »

1rainman

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Re: Property Tax Benefits with Fruit Tree Farm? (California)
« Reply #1 on: December 30, 2022, 09:11:55 PM »
Agriculture tax is lower than residential. So if your house is a farm you pay a lot less in taxes in any state.

Galatians522

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Re: Property Tax Benefits with Fruit Tree Farm? (California)
« Reply #2 on: December 30, 2022, 10:01:36 PM »
You need to contact your county's assessors office and ask them.

spaugh

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Re: Property Tax Benefits with Fruit Tree Farm? (California)
« Reply #3 on: December 30, 2022, 10:11:55 PM »
Sure you can do that but you will open yourself up to more scrutiny on your tax filings and also the USDA is going to want you to tell all about your operation and then be able to dictate to you how you are allowed to do things.  You will have to ask yourself if its worth it or not.  Is your orchard a legit farm that passes the sniff test or are you trying to cheat big brother?  Either way, they are going to get your money.  They can do it to you the easy way or the hard way.
Brad Spaugh

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Re: Property Tax Benefits with Fruit Tree Farm? (California)
« Reply #4 on: December 31, 2022, 05:24:49 AM »
Not a tax professional, but I have looked into this when deciding to operate a small farm on land that includes my private residence. CA had two exemptions that could lower your property tax through ag use, neither of which your property likely qualifies. Williamson Act requires 100 acres of land and Urban Incentives Zone Act cannot have improved land. Both cases require demonstrated sale of ag goods (fruit).  I’m my case, I run my orchard through my corporation for federal tax benefits among other considerations but that opens you to a number of other oversights including demonstrated profitability and S-Corp annual renewals.  To Brad’s point, in the end big brother gets his due and there is no cheating the system.

Pouteria_fan

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Re: Property Tax Benefits with Fruit Tree Farm? (California)
« Reply #5 on: December 31, 2022, 10:15:06 AM »
Not a tax professional, but I have looked into this when deciding to operate a small farm on land that includes my private residence. CA had two exemptions that could lower your property tax through ag use, neither of which your property likely qualifies. Williamson Act requires 100 acres of land and Urban Incentives Zone Act cannot have improved land. Both cases require demonstrated sale of ag goods (fruit).  I’m my case, I run my orchard through my corporation for federal tax benefits among other considerations but that opens you to a number of other oversights including demonstrated profitability and S-Corp annual renewals.  To Brad’s point, in the end big brother gets his due and there is no cheating the system.

Thanks, I appreciate your insight. I'm not surprised it seems much more difficult in California to do so. I heard about the topic in a discussion about land in Montana, where it appears the rules are much more feasible. Found this list, looks like Oregon might be even easier:

https://www.livewaterproperties.com/what-does-it-take-to-qualify-as-an-agricultural-property/