Property values in the Boca Rotan area have skyrocketed. If you own a tract of land, you could end up on the hook for a significant amount of property tax that hinders your financial growth and stability. As a result, you might be wondering if there’s a way to ease your tax obligation. There may be depending on your circumstances.
Years ago, the Florida Legislature enacted the Greenbelt Law. Through this statute, you can seek to have your land designated as agricultural, which provides significant tax incentives in that the property is shielded from tax increases that would normally be incurred because of approaching developments.
Before you can acquire agricultural classification, you’ll have to meet some legal requirements.
Bona fide agricultural purposes
Only those lands that are used for bona fide agricultural purposes can qualify for agricultural classification. Figuring out what that means can be tricky, especially if you’re unfamiliar with the law. Here are a few ways to interpret the bona fide agricultural purposes phrase that must be applicable to your land:
- How is the land primarily used? It’s important to note that only land that is used primarily for agricultural purposes will receive the agricultural classification. Therefore, if you have mixed-use property, only those portions that are used for agricultural purposes will obtain the classification and its corresponding tax benefits.
- Define “agricultural purposes” To obtain agricultural classification, you have to show that your property is used for agricultural purposes. Statue provides some clarification as to what this means, specifying that livestock, dairy, and horticulture all qualify as agricultural purposes. However, the law, while listing certain types of qualifying activities, also specifies that those activities identified is not an exhaustive list of qualifying agricultural activities. So, you have a little flexibility here to argue that the purpose to which you’ve put your land complies with this section of the law.
- What does “bona fide” mean? Your agricultural use of the land must have a bona fide purpose to qualify you for agricultural classification. Generally, this means that you must make a good faith effort to monetize your agricultural activities. To be a bona fide endeavor, you must target profit or at least seek to recoup investment costs. Several factors are assessed here to determine whether the land’s use is bona fide, including how long the land has been used, the consistency with which the land has been used, the size of the property, the purchase price of the land, the care that has been provided to the land, and any other applicable factors.
Even if you secure agricultural classification, you may have to recertify your property. Therefore, it’s a good idea to keep detailed records of how you use your land and your business operations. That way you’ve created a paper trail that demonstrates how you continue to put your land to bona fide agricultural use.
Do you need assistance navigating your real estate issues?
Navigating real estate issues can be challenging. Whether you’re facing a zoning, closing, or land use problem, you’re bound to be subjected to the provisions of the law. And if you don’t use the law to your advantage, then you could be hit with significant financial loss.
You don’t want that to happen, which is why it’s a good idea to consult with your attorney before trying to tackle these issues. Hopefully then you can secure an outcome that protects you, your land, your reputation, and your finances.
