• Sarah Lipkowitz

Buying A Property On The Ag Reserve

Updated: Dec 29, 2019

The Agricultural Reserve is comprised of 93,000 acres of land in Montgomery County, Maryland. Making up almost a third of the County’s land, it runs from Poolesville and Dickerson on the west side of I-270 to Damascus on the east side of the I-270 in the northern part of the county. For many buyers seeking a to purchase a farm or to live in a rural area with access to D.C. and many other amenities, the Ag Reserve is an excellent choice, but what if you don’t plan to grow crops or keep animals? In this blog, I will address common questions about zoning, taxes, and more.

History. Montgomery County is proud of its Ag Reserve. In fact, it may be surprising to some that Montgomery County, Maryland has the highest percentage of farmland under agricultural land preservation easements in the nation. As developed and populated as Montgomery County is today given its close proximity to the District, the county began the process of preserving farmland in 1964 by designating particular growth corridors in the General Plan. The Agricultural Reserve itself was established in 1980.

Zoning. The Agricultural Reserve has its own zoning. AR for, you guessed it, Agricultural Reserve Zone. The Ag Reserve is typically bordered by RC zoning which stands for Rural Cluster and allows for a mix of agricultural and low density residential uses. AR zoning designates agriculture as the preferred use though there are those that live on the Ag Reserve without actively farming. Buyers that intend to use the land for purposes that are not exclusively agricultural will need to get conditional approval from the County. There are plenty of people who live on the Ag Reserve and do not actively farm. Typically, the limit is one dwelling per 25 acres though there is an exception for child lots if it facilitates the continuation of family farming. Essentially, any development that occurs on the Ag Reserve must be situated to support agriculture as the main use and uphold the rural integrity of the area. Visit this website to find more information on Montgomery County zoning laws.

Taxes. The Agricultural Use Assessment saves farm owners money on state and local property taxes and has been essential in preserving the State’s farmland. This law dictates that farmland be assessed according to its use. This tax credit may also extend to wooded acreage. If you are curious about a certain property’s tax burden, you can look it up on the Montgomery County website. You’ll be able to see that the assessed value of a 30 acre farm on the Ag Reserve is not much higher that a 4 bedroom single family home in a neighboring community. This is the work of the Agricultural Use Assessment. If you don’t plan on using the property to farm, you may consider allowing a farmer to grow crops or raise animals on your excess acreage.

We’ll talk more about ag initiatives later on, but two tax related initiatives that you should be aware of are the Energy Tax Relief program and the Urban Agricultural Tax Credit. These are county wide initiatives. The Energy Tax Relief initiative gives certified ag producers a tax break to help alleviate the financial burden of paying for fuel while the Urban Agricultural Tax Credit provides a credit to owners of agricultural properties in areas zoned Residential. Montgomery County has dozens of tax credits you may be eligible for and you can learn more about them here.

Development Rights. Aside from the rights to develop child lots, TDRs or Transfer of Development Rights are commonplace on the Ag Reserve. TDRs allow owners of 25+ acre properties in Rural Density Transfer (RDT) Zones to divide their parcels for development. Owners have the right to either develop within the allowable density (which is one dwelling per 25 acres on the Ag Reserve) or they may be compensated for selling their TDRs thereby preventing the land from being developed. When a TDR is sold, the development rights transfer to designated “sending area.” This allows for residential development to continue and for farmland to remain undisturbed. The decision is irreversible, even for future owners.

In 2008, it was decided that a more comprehensive easement was required to protect contiguous farmland. Similar to TDRs, Building Lot Termination (BLT) easements protect farmland by restricting development and non-agricultural uses. BLTs compensate farm owners who can demonstrate that a lot is buildable, but that they have chosen not to develop. Developers may purchase BLT easements or donate to the Agricultural Land Preservation Fund (ALPF). It works similarly to a forest conservation easement where a developer must either designate space to plant trees or give money to the county to plant trees elsewhere. While we’re at it, easements are common on Maryland farmland so you may want to check the County website to find more information on the different types easements. You can find more information on BLTs here.

Things To Do. Education and tourism are a big part of the Ag Reserve. There are a number of farms, breweries, and orchards to visit. Many equestrians call the Ag Reserve home since the guarantee of never having a housing development as a neighbor appealing. In fact, my own horse lives on the Ag Reserve. Butler’s Orchard is one of the most well-known businesses on the Ag Reserve. Located in Germantown, Butler’s boasts a shop, annual events, and pick-your-own produce. Their pies are particularly popular. If you like visiting wineries, Rockland Farm in Poolesville offers tastings and tours. If you prefer beer, the Brookeville Beer Farm and Waredaca Brewery are quite popular. Friends of mine trail ride to Brookeville Beer Farm and Waredaca even offers the opportunity to watch riding events on a working horse farm. Stop by on a Saturday to try local food trucks or bring cash and pick up a burger from the Sunshine General Store on the way. Trust me, it’s amazing! Click here to find a list of educational and tourism opportunities!

Initiatives. There are a number of agricultural initiatives in place to encourage farming on the Ag Reserve. The New Farmer Initiative helps those new to the farming business get on their feet by providing business training and assistance finding a property. In the meantime, new farmers can get to work by taking advantage of an incubator site designed to help them start their business. The County also has a Marketing Assistance Initiative and a Farm To Table directory for all Montgomery County residents. These initiatives along with a number of others are all designed to encourage and support agribusiness. Also of note is the Agricultural Emergency Assistance Program. Montgomery County created the first County funded Drought Assistance Program in response to the droughts of 1997 and 1999. The result was the creation of the Ag. AEP to assist farmers in recouping losses during times of hardship.

If you would like more information on buying a farm in Montgomery County, check out my article on the topic!

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