The Benefits Of Buying A Farm
Updated: Dec 30, 2019
Tax benefits. The end.
Just kidding…sort of. Maybe you are an equestrian, maybe you are interested in farming or homesteading, or maybe you just want some peace and quiet, whatever your reasons, most states tax farmland on its agricultural value instead of its market value so if you were terrified of the property taxes on that piece of land you’ve been eyeing, don’t be.
Zoning. It is not uncommon to find that agricultural zoning allows for many other uses which means that your farm may not be in the middle of nowhere in a few year’s time. You may or may not find this appealing and it is important to check out zoning restrictions and proposed development for the area. It also means that you don’t need to be a farmer to buy farmland and put it to use. However…
Leasing. Farmland is important and we should make an effort to preserve it. Many people who buy farmland have no intention of actually farming it. Zoning restrictions (or lack thereof) may drive up the cost of land and make it virtually impossible for farmers to afford properties that suit their needs. If you fall into the “peace and quiet” category I mentioned before, you may consider leasing out your land to local farmers. Maintaining properties with a lot of acreage often involves an incredible amount of work. If you lease the land to a farmer, you will more than likely still qualify for tax benefits and your property will be well maintained.
Agricultural Reserves. If you live near a city, chances are you’ve seen farms surrounded by housing developments. This can be inconvenient and frustrating for many farmers and equestrians. If this a concern, an agricultural reserve, like the one in Montgomery County, Maryland, is a great option. The land cannot be used for purposes other than agriculture (so no subdividing). Even without the ability to sell to developers, properties on agricultural reserves will still appreciate in value, particularly if they are located near cities. There is always someone willing to pay top dollar for space and that is one thing you will have plenty of because there is often a minimum acreage requirement (25 acres in Montgomery County). Although the land must be used for an agricultural purpose, but you may live on the property and lease out the land to farmers while still qualifying for tax benefits.
The Environment. It’s true, farming can be harmful for the environment, but done right, it can be very good for the environment. Pollution, erosion, and habitat loss are major concerns when farming is done irresponsibly, but according to the World Wildlife Fund “when farming operations are sustainably managed, they can help preserve and restore critical habitats, protect watersheds, and improve soil health and water quality.” So do your research and do some good!
Whether you plan to farm the land yourself or rent to a local farmer, everyone can benefit. The agri-business system is made up of producers, processors, sellers, and much more and you can help support it.
Food for thought…
Homeowners’ Associations. In a community like Wellington, Florida, where there are many equestrian properties and neighborhoods, there will likely be an HOA and they can be all over the map. In some neighborhoods, you may required to build a house before you build a barn and other neighborhoods may restrict commercial activities—like boarding horses. However, some neighborhoods have homeowners’ associations that are completely inactive and do not enforce their covenants, conditions, and restrictions at all. It is always important to learn more about the HOA before buying a property.