The Florida Agricultural Classification (a.k.a. Ag Exemption)

Purpose:

The purpose of this website is to serve as an inclusive reference guide to farmers, ranchers, nurserymen, and all other agricultural property owners. This website will not take the place of an experienced real estate attorney although if you wish to have a guide that will point you in the right direction so those reading may have a complete understanding of agricultural rights, then look no further.

An attorney isn’t needed in many cases such as simply applying for the Agricultural Classification, or in some cases, if you wish to personally petition a denial or partial approval of an Agricultural Classification. When it comes down to filing a lawsuit against a government agency, it is my recommendation to hire an attorney.

The intentions:

The Florida Agricultural Exemption is really not an exemption. It is a classification and was intended to alleviate an overbearing amount of taxes on lands used for agricultural purposes. Since development has been occurring, land values increase and as an indirect result, so do taxes. What incentive would a farmer have if he/she were to pay high taxes on the farm when that farmer could just sell the land for a profit and retire in a condo somewhere else? That’s where the Agricultural Classification comes in. First, see if it will lower your taxes and then see how to qualify, apply, and keep it on your property.

Calculating real estate taxes…

Let’s briefly look into the way real estate taxes work in Florida. You can check out the Department of Revenue website and scroll down a bit until you see calculating your property taxes at https://floridarevenue.com/property/Pages/Taxpayers.aspx to calculate your potential taxes yourself or to get a general idea download the excel file below. You may have to do some research on your property first. You’ll need to know your land and building values, amount of acreage and how many acres you’re applying for, assessed value, mileage rate, if you have a Homestead Exemption, and the agricultural use rate (more on what that is next).

The agricultural use rate is basically a new assessed value per acre (you’ll have to call the Agricultural Department to find out what the rate is). Remember, you’re being taxed on your assessed value – NOT your market value. Your assessed value is made up of your land assessed value and building assessed value. If your land assessed value is say, $50,000 per acre, and your mileage rate is say 20.19, then your taxes per acre will be $1,010 ($50,000 x .02019). Tip: the mileage rate is divided by 1,000 before it’s multiplied by the assessed rate.

The agricultural rate is typically lower than the assessed rate on the land, say anywhere from $300 to usually three to four thousand dollars. So for example, if your assessed rate is $4,000 per acre, using the same mileage rate of 20.19, the taxes would be $80.76! The Agricultural Classification overrides your assessed value for the land only, not the improvements.

To find out about how the agricultural rates are calculated by the Agricultural Departments, click here.

Benefits:

Be careful what you wish for. There’s always a catch.
Laurie Halse Anderson

Although the Agricultural Classification is not for everyone, it is most helpful to those that own vacant (non-improved) land with an agricultural practice. As previously stated, the classification was originally written for those farmers with many acres; therefore, it would naturally benefit those people the most. The classification does get a little fuzzy when classifying properties with residential improvements. Here are the benefits of the classification with an explanation of each benefit:

  • It may lower taxes by lowering the assessed value of the property. This does not always fit the bill, but I’ll explain this further in examples later on.
  • If there aren’t any residential structures on the property, the entire property can qualify for the Agricultural Classification. In fact, a couple of situations come to mind with residential structures on the property. One can include land under groom’s quarters/caretakers quarters and land under houses built on stilts, assuming the land underneath the house is being used for agricultural purposes.
  • The Florida Statutes state that those properties with Agricultural Classifications do not need building permits for improvements related to the agricultural use (FL Statute 604.5). If an improvement was constructed on a property without the Agricultural Classification, the property owner can face serious fines. In fact, generally speaking, the Agricultural Classification being annual may negate all fines from code violations when regarding agricultural building improvements. (That being said, the property owner must still abide by FEMA flood zones. Changing the topography of the property such as filing in a pond or increasing the level of the property can be cause of fines.) Example: a taxpayer has an agricultural business on the property as of Jan 1 and improved the property with a building without permission, for agricultural purposes. Code Enforcement shows up on the property and fines the land-owner hundreds of dollars for the illegal construction of the improvement (examples include a barn, stables, or even fences). The owner, in turn, after the fines, applies for the Agricultural Classification and is approved; those fines then have no legal bearing according to the Florida Statutes, assuming all other stipulations were satisfied (i.e., flood maps, etc.). The Agricultural Classification is valid from Jan 1 to Dec 31 (the entire year). It does not matter when the inspector showed up for a review or if you applied in late February. On the other hand, when the property is sold, or if the property rights are conveyed to another owner, or if the ownership changes, as previously discussed, the Agricultural Classification is lifted from the property, and code enforcement may fine the new property owners for having an unpermitted improvement on the property or may ask you to remove the improvement due to the code violations. Buyer beware!
  • The Ag Classification protects against complaints from county officials, neighbors, or ag haters! As long as the farm or ranch has been active for a year or longer, the property is protected from complaints, according to the Florida Statutes (FL 823.14(4)(a)&(b).

Downsides.

Here is the downside of the Ag Classification. I know every situation is different and some may have some kind of amalgamation of some or all the situations listed. This is just a brief list of what I have seen.

  • The Ag Classification may increase your taxes! I know this is contradicting what I previously said, but if there is a property that has a Homestead Exemption way back when the assessment rates were incredibly low, and the ag rate is higher than the capped rate, then an increase in taxes will be the result. Ask someone such as the property appraiser or do the math first to see if the Ag Classification will decrease or increase your taxes if this is your motive.
  • It will destroy your portability. By law, Homestead and Agricultural Classified lands cannot be on the same portion of the property. Portability is the transfer of savings when you homestead your property (and by the way, portability must be applied for. If you don’t use it, you’ll lose it). If your market value is $100,000 and your assessed value is $60,000, then the difference ($40,000) is portable (or a portion of it) when you sell your house and buy another one in the state of Florida only. So, let’s say you upgraded and bought another house for $200,000. Your assessed value will be $160,000 ($200,000 purchase price – $40,000 in portability = $160,000 assessed value). It only makes sense if you limit your Homestead land or negate the Homestead completely, your portability will be minimized or negated as well. Over time, the Agricultural Classification annual savings will outweigh the one-time portability in homestead savings, but it will not outweigh the tax savings after the new home is purchased (think of the yearly taxes after you buy the new home). It will take some soul searching and foresight, but just be sure that if you want the Agricultural Classification, you will keep it for a long time if this applies to you.
  • A Homestead may protect you if you are being sued. This is where I would check with a real estate attorney. If you lift the Homestead and apply an Ag Classification, some of your property may no longer be protected against seizure from a lawsuit. Example: a property owner with nine acres of a cattle ranch a and one-acre homestead in a somewhat developed area is subject to a lawsuit because of an accident involving a cattle rancher on his property. The cattle rancher hired a good lawyer and the lawyer can prove that the property has surplus land, being able to divide it without being a threat to the one acre of Homestead land. It is very possible the land owner may lose some or all of the nine acres of non-homestead land in that lawsuit.
  • Heaven forbid should you ever stop practicing agriculture on the property. Should you ever decide to do this, your assessed value may rocket to market value, which can drastically increase your taxes. It may be better for some to just homestead the entire property if you plan on retiring in a couple of years! Also, by the Florida Statutes, the county appraiser is required to, at a minimum, inspect your property once every five years (FL Statute 193.023 (2)). I hope you pass the review! NOTE***Pay attention to this if you are a homeowner. In a rising or stable market, the strategy becomes: the more Agricultural Classified land you can acquire and the longer you can hold the classification, the better, but when the market plummets, you may want to drop the Agricultural Classification (assuming you have no illegal structures, you do not need the Greenbelt Law protection, and you are not violating zoning or HOA code with farming activities). At this point, it may be beneficial to apply for a Homestead Exemption to cap the assessed rate. This way, when the market increases again, the assessed value stays low and so will his taxes, the property is protected by the Homestead Exemption.

Application Process.

You can find the application in the next section “Qualifications and Application Processes” or in the first section of the subscription section. Application deadlines are March 1 in the year of which you are applying (FL Statute 193.461 (3.a). Apply in late February if you are a taxpayer or if you miss the deadline, taxpayers will have until the middle of September to submit a late application with extenuating circumstances as to why one couldn’t apply earlier (FL Statute 193.461) along with a petition. Extenuating circumstances means any good reason as to why you couldn’t or didn’t apply within the first two months of the year. Good examples include sickness/illnesses, family issues, you live in another country or maybe English is a second language.

The reason why I am stating that a taxpayer has until the middle of September is because if the taxpayer is denied the application, a petition can still be filed for a denial of the Agricultural Classification application. After the middle of September, the taxpayer has no recourse for this denial. Theoretically, applications can be submitted to the property appraiser up until and including December 31, but good luck with that one!

These deadlines also work as a double-edged sword. The property appraiser wouldn’t dare deny a review of a property with the classification after July. The reason is because the property appraiser must notify the property owner on or before July 1, giving the owner the right to appeal. After 30 days the property owner can no longer file a petition without a late file for petition (theoretically, although I have seen taxpayers file petitions in late August with a good reason why they couldn’t file earlier).

What is on the application for the classification is the same from county to county. You should specify what agricultural use you are applying for and for how many acres that use covers. The land owner can apply for as many different uses as they would like. 

Once the application is submitted, you need to prove use is and was on the property on January 1. January 1 is the deadline from my experience. If the taxpayer did not own the property at this point in time, then the application process is an uphill battle. Recently I have seen some county appraisers waive this as long as the applicant was close. A soft target if you will. The only other option to this is if the applicant did not own the property on January 1st but leased the property and can prove this as well as being responsible for the real estate taxes (stated in the lease). I have heard this works for the Homestead Exemption too but unsure at best. For the purpose of this website, we will abide by the Jan 1st deadline.

The second characteristic needed is that you need to have a bona fide agricultural business. If these two aspects can be proven, the classification is pretty much a sure thing.

Qualifications and Agricultural Application Processes:

  1. Use: Use is the absolute guidepost for the Agricultural Classification. Without this, nobody can argue that they deserve this classification. So the question is: what uses qualify for the Florida Agricultural Classification? For the purpose of this section, the term “agricultural purposes” includes, but is not limited to, horticulture; floriculture; viticulture; forestry; dairy; livestock; poultry; bees; pisciculture, if the land is used principally for the production of tropical fish; aquaculture, including algaculture; sod farming; and all forms of farm products as defined in s. 823.14(3) and farm production. “Farm product” is a bit vaguely defined on purpose in this section. Farm product is defined as any plant, as defined in s. 581.011, or animal or insect useful to humans and includes, but is not limited to, any product derived therefrom. Be sure to read the case law: Robbins v Racetrack Training Center (2003) and McClendon v. Nikolits (2017) if you subscribe towards the bottom of the page. This can open the floodgates to many arguments. I’ll leave most of that up to the interpretation of the reader; however, here is a list of what I have seen approved in most counties with the definitions and links if available to a suggested application process.
  • Apiculture: beekeeping.
  • Aquaculture: farming of aquatic organisms such as fish, crustaceans, mollusks, and aquatic plants. Some consider herpetoculture a part of aquaculture. I felt it was important to include this because in some counties properties with this use have been classified as agriculture. Herpetoculture is defined as the keeping of live reptiles and amphibians in captivity, whether as a hobby or as a commercial breeding operation.
  • Aquaponics: refers to any system that combines orthodox aquaculture (raising aquatic animals such as snails, fish, crayfish or prawns in tanks) with hydroponics (cultivating plants in water) in a interdependent environment.
  • Aviculture: the practice of keeping and breeding birds.
  • Equine: There is much to be said about this category. Check the link to more information.
  • Forestry: the profession embracing the science, art, and craft of producing, managing, using, and safeguarding forests and associated resources in a sustainable manner to meet desired goals, needs, and values for human advantage.
  • Fruit Orchards: a tree or shrub farm maintained for the production of fruit or nuts.
  • Goats and Sheep: typically they can be bred for food or milk, however one can argue dwarf goats sold for pets may qualify if there’s proof they’re useful to humans…
  • Grazing: What is found much throughout Florida are cattle ranches for slaughter or starter cattle. Some people want to consider horses or goats for pasture grazing but they have their own categories.
  • Hydroponics: the method of growing plants without soil, using mineral nutrient solutions in a water solvent.
  • Nursery: the division of agriculture that deals with the business of growing plants. It includes the farming of medicinal plants, fruits, vegetables, nuts, seeds, herbs, sprouts, mushrooms, algae, flowers, seaweeds and non-food crops such as grass and ornamental trees and plants. It also includes plant preservation, landscape restoration, landscape and garden design, construction, and maintenance, arboriculture, which is the cultivation of trees and shrubs and floriculture: or flower farming, is a discipline of horticulture concerned with the cultivation of flowering and ornamental plants for gardens and for floristry.
  • Poultry: the sale of chicken or the eggs, whichever came first…
  • Row Crop: Production of crops.
  • Sod Farming: growing grass for lawns, golf courses or other landscaping reasons.
  • Miscellaneous: several different uses.
  • Everglades Agricultural Area (EAA) mining lands.
  • Viticulture: the science, production, and study of grapes.

To continue reading about:

  • What does not qualify
  • Commercial business for agriculture
  • Petition hearings and the denial of the agricultural classification
  • List of agricultural case law and links to the cases
  • Agricultural strategy
  • Miscellaneous agricultural statutes such as agritourism
  • Sale of a agricultural classified property
  • and more..

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