Special Use Valuation for Farmland

Special Use Valuation for Farmland

Special Use Valuation for Farmland is a tax assessment method that allows farmland to be valued based on its current use for agricultural purposes rather than its potential market value for development or non-agricultural use. This valuation approach is primarily used to reduce property tax burdens on farmers and preserve agricultural land.

Under this method, the value of the farmland is determined by its income-producing capability, taking into account factors such as crop yields and production costs, rather than the highest and best use of the property, which could include residential or commercial development. For instance, if a farm generates $50,000 per year from crop sales, the special use valuation would focus on the income generated from farming rather than what the land would sell for if developed into housing.

This valuation is especially beneficial for heirs of farmland owners, as it can help prevent the forced sale of land to pay estate taxes, ensuring that the farmland remains in agricultural use and within the family.