In purchase to stimulate the successful use of agricultural land in Florida, the Florida legislature enacted Portion 193.461, Florida Statutes. This statute is regularly referred to as the “Greenbelt Regulation.” Agricultural classification of land less than the Greenbelt Regulation affords home house owners considerably decrease authentic home taxes compared to taxes on property categorised for other purposes. The Greenbelt Law facilitates the economically viable operation of agricultural companies by shielding agricultural property from prospective residence tax improves attributable to encroaching enhancement. Given the probable for abuse of the Greenbelt Regulation by speculative builders, assets proprietors will have to adhere to unique necessities in order to obtain and sustain the tax benefits of the agricultural classification.
The Greenbelt Legislation states that “only lands that are utilised generally for bona fide agricultural reasons shall be classified agricultural.” The next sheds gentle on the meaning of this phrase:
- Main use. The land ought to be mostly utilized for agricultural reasons. If land is employed for each agricultural reasons and non-agricultural needs, only the portion of land made use of primarily for agricultural uses might be categorized as these kinds of for tax uses. Hausman v. Hartog, 371 So. 2d 1036 (Fla. 1978) (permitting agricultural classification for part made use of as an orange grove but denying classification for part employed as vacant land). With respect to a residence made use of in connection with agricultural land, Part 193.461(3)(d) delivers that the part of residence containing the home and curtilage ought to be assessed individually from the portion of residence employed for agricultural functions.
- Agricultural reason. The land need to be utilized for an agricultural goal. According to Part 193.461(5), “the time period ‘agricultural purposes’ features, but is not restricted to, horticulture [plants] floriculture [flowers] viticulture [grapes] forestry dairy livestock poultry bee pisciculture [fish], if the land is made use of principally for the output of tropical fish aquaculture as defined in Area 597.0015 algaculture [algae] sod farming and all kinds of farm items as defined in Area 823.14(3) and farm creation.” The phrase “includes, but not limited to” is unambiguous and contemplates further non-specified functions. McLendon v. Nikolits, 211 So. 2d. 92 (Fla. 4th DCA 2017) (the expression “agricultural purposes” consists of aviculture, which is the raising of wild birds for sale as animals). Nonetheless, the time period “agricultural purposes” is not with out limitation. Beker Maritime Co. V. Perkins, 493 So. 2d 494 (Fla. 2d DCA 1986) (mining is not an agricultural purpose, but mining buffer spots leased for business agriculture might represent an agricultural goal).
- Bona fide agricultural goal. The landowner will have to be in a position to establish that the land is made use of for a bona fide agricultural function. According to Part 193.461(3)(b), “[t]he phrase ‘bona fide agricultural purposes’ suggests fantastic religion commercial agricultural use of the land.” The Florida Administrative Code defines “good faith business agricultural use” as: “[T]he pursuit of an agricultural activity for a fair revenue or at the very least upon a affordable expectation of assembly financial commitment cost and recognizing a affordable earnings. The gain or affordable expectation thereof ought to be considered from the standpoint of the charge owner and measured in gentle of his expense.” Rule 12D-5.001(2), F.A.C. On this foundation, house appraisers may possibly deny the agricultural classification for hobby farms and lands utilized for personal use, satisfaction, or activity.
Segment 193.461(3)(b)1 delivers a record of the following factors to establish whether or not an agricultural use is “bona fide”:
- The duration of time the land has been so utilized.
- No matter if the use has been continuous.
- The buy price compensated.
- Size, as it relates to unique agricultural use, but a minimal acreage may perhaps not be necessary for agricultural evaluation.
- Regardless of whether an indicated work has been built to care adequately and adequately for the land in accordance with approved industrial agricultural procedures, like, with out limitation, fertilizing, liming, tilling, mowing, reforesting, and other acknowledged agricultural methods.
- No matter if the land is below lease and, if so, the powerful size, conditions, and problems of the lease.
- This sort of other components as might develop into relevant. For the function of construing the this means of the phrase “such other factors as could turn into relevant,” Rule 12D-5.004, F.A.C. enumerates a checklist of additional components for thought.
As a end result of litigation concerning regardless of whether the act of giving to market residence need to result in the denial or reduction of an agricultural classification, the Florida legislature amended Segment 193.461(3)(b)2, Florida Statutes, as follows: “Offering residence for sale does not represent a most important use of land and may possibly not be the foundation for denying an agricultural classification if the land continues to be employed mainly for bona fide agricultural purposes whilst it is currently being provided for sale.”
Landowners need to at first implement for agricultural classification of their lands. The Florida Department of Revenue’s Sort DR-482 is the common software sort, and Florida assets appraisers may possibly request supplemental data from the landowner in help of the application. Landowners really should be well prepared to provide in depth facts to residence appraisers (e.g., fiscal records, management designs, leases, and so forth.). The type will have to be submitted on or just before March 1, nevertheless extenuating situations may possibly extend the deadline. If the property appraiser denies the landowner’s application for an agricultural classification, then the landowner may possibly appeal to the price adjustment board (“VAB”) pursuant to Section 193.461(2), Florida Statutes. The landowner may possibly file a lawsuit in circuit court docket to challenge an adverse VAB decision.
Following the preliminary application of the agricultural classification is permitted, each county decides whether it will call for landowners to submit an yearly renewal software or regardless of whether the county will waive annual renewal purposes. Accordingly, it is necessary to verify with the applicable county irrespective of whether an annual renewal software is necessary. In all instances, the property have to keep on to be utilised for agricultural applications or it will shed its agricultural classification. Home appraisers may well look into the use of residence and collect again taxes for periods when the house was not utilized for agricultural uses. The vital date for willpower of the agricultural use of land is January 1 (though January 1 is not the only date on which land really should be set to an agricultural use for agricultural classification needs).
Courts apply the “physical action test” to ascertain no matter whether the use complies with Greenbelt Regulation for agricultural classification functions. Schulz v. Adore PGI Companions, LP, 731 So. 2d 1270 (Fla. 1999) (thinking of genuine physical use of land) Straughn v. Tuck, 354 So. 2d 368 (Fla. 1977) (home appraiser determined that land in its organic, unimproved condition was not entitled to agricultural classification) Greenwood v. Oates, 251 So. 2d 665 (Fla. 1971) (tract contained substantial stands of unmerchantable timber, advancements to the land ended up not made for forestry purposes, and there ended up no forestry management operations because the invest in) Tilton v. Gardner, 52 So. 3d 771 (Fla 5th DCA 2010) (agricultural classification was denied due to lack of work to market regeneration soon after harvesting of timber, specifically by failing to depart sufficient seed trees, failing to harvest water oaks, and allowing for underbrush to prosper) RH Resorts, Ltd. V. Donegan, 881 So. 2d 1152 (Fla 5th DCA 2004) (reduction of agricultural classification due to proof of development of a golfing training course and the deficiency of pine farming activities).
- Timing of Original Software and Renewal Applications. It is incumbent on the landowner to acquire and sustain a property’s agricultural classification. The software ought to be timely submitted and, if denied, well timed appealed. If the pertinent county demands once-a-year renewal of the agricultural classification, then the landowner need to calendar renewal dates and be certain that annual renewals are well timed filed.
- Selling Land with an Agricultural Classification. In a contract for the invest in and sale of land obtaining an agricultural classification, the seller must reserve the proper to carry on the seller’s agricultural use of the land until finally closing, and the seller must carry on these types of agricultural use. This will aid to shield the vendor from denial of the agricultural classification even though the assets is underneath contract.
- Paying for Land for Agricultural Uses. The purchaser of residence who expects to use the residence for agricultural functions will want to file an first software even if the assets previously has an agricultural classification. In addition, the purchaser must make sure compliance with the actual physical activity examination on closing (i.e., ongoing use of land for agricultural purposes).
- Leasing. If a house proprietor contemplates leasing the house, the agricultural classification need to be taken into consideration in the lease. For example, between other factors, the lease must build regardless of whether the lessor or the lessee will file the original and renewal programs for the agricultural classification, involve the lessee’s compliance with the bodily action examination, and allocate duty for payment of taxes (e.g., payment of comprehensive taxes in the celebration the agricultural classification is denied or misplaced). Mackle Co. v. Metropolitan Dade County, 220 So. 2d 422 (1969) (lessee unsuccessful to use land for agricultural needs).
- Use of the Property. The landowner should really communicate with the residence appraiser early in the course of action to ascertain the applicable requirements and documentation in order to establish and sustain the agricultural classification. Once the agricultural classification has been received, the landowner need to make sure continued agricultural use of the residence. For instance, timberland might demand a timber management program, periodic harvesting of timber, contracts for trees, etcetera.
- Cessation of Use. If the assets is no for a longer time made use of for agricultural applications, then the landowner need to notify the home appraiser of these types of cessation. This will induce the house to reduce the agricultural classification and the tax strengths thereof. Failure to timely notify the house may possibly final result in the assessment of again taxes.
The Greenbelt Law helps to make certain the ongoing viability of agricultural use of land in Florida. As talked about earlier mentioned, getting and protecting an agricultural classification for property involves strict adherence to certain specifications.