From Today’s Sunbeam:
Panel mulls N.J. farmland tax loophole
By MARTIN C. BRICKETTO
One legislator says a panel investigating constitutional reforms should reconsider the way the state taxes farmland, calling the status quo a loophole for wealthy individuals with vast properties. A farmer advocacy group felt a study of the issue would clarify why the program has remained the same since the 1960s.
Under the state’s Constitution and laws, those who own a minimum of five acres of property and gross $500 per year from agricultural products can qualify to have their land, not the structures, assessed as farmland
“Which is very, very low,” said state Sen. Fred Madden, D-Washington Township. “It could be roughly one tenth of what your neighbor is paying for the same acreage but who doesn’t grow vegetables.”
Madden is part of a joint legislative committee looking into consitutional reforms and a possible Constitutional Convention. The committee is among four developing ways to ease the state’s property tax problems. Madden said well-off landowners who aren’t true farmers abuse the system to catch a break on their property taxes. He said he would like to see that section of the constitution modified, but is still reviewing how.
“Joe average citizen would look at this and say this is unreasonable,” Madden said.
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“Real farms” wouldn’t be impacted by a change because they do more than $500 worth of business, Madden said.“What was $500 worth (when the program was adopted), what is that worth today? It has never kept pace with the rate of inflation,” Madden said.
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The New Jersey chapter of the Sierra Club points out that the lawns in front of Johnson & Johnson and Roche Pharmaceuticals facilities in Branchburg and Merck’s headquarters in Readington are all regarded as farmland under the current system.The program has been abused by companies that are banking land for future development, according to the group, which notes that the builder Toll Brothers is technically the biggest “farmer” in Hunterdon County.
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In New York State, ten acres of land and $10,000 worth of agricultural production is required to qualify for their farmland assessment, according to the Sierra Club.
(emphasis added)
This is going to make quite a few “estate” owners unhappy. Drive through some of the wealthy areas of Somerset and Morris and you’ll typically see stacks of firewood outside the gates of many of these homes.
Take a cord, drop some money in the rusty tin can. When you get home check their tax records.
jb
I agree; this needs to be changed. If not, then make it so that farm land can not be converted to cluster housing and/or residential buildings.
It’s absolutely a good idea to raise the income level needed to qualify for a farmland assessment, but it will make only the tiniest difference in tax revenues and only in places that already have relatively low property taxes.
Check out the tax rates per $100 of assessed value in “rural” areas vs. urban and even heavily suburban. Unless you’re talking about wealthy enclaves (think Little Silver or Fair Haven) it’s not even close.
Lindsey,
Aren’t you receiving this tax break in Monmouth County?
How about paying $800 / year in prop taxes on 13 acres in Wall, NJ ? Or $3000 / yr on 300 acres in Hunterdon Cnty ? Its a lotta paperwork but other than that, its very simple. You don’t even need to be profitable. You can just pay the real farmer down the street $500 to cultivate some hay on your land, and then he pays you back the $500 for what he harvests. Everbody wins, right? LOL.