Dedicated Ag land for property tax break (Hilo: home, buy)

[JohnnyHF]

Hi,
Had a question about applying for property tax break on 10 acres. It is currently raw land with nothing on it. I ultimately intend on building a home on the property in about 2 years. In the mean time I'd like to fence it and put a few head of cattle on it because not only will cattle eat down the foliage but I understand I can receive a significant tax break. A few questions for those of you familiar with this sorta thing;

1. Is the county still extending this tax break?
2. Would I have to fence the entire property to get the break?
3. Are there any time restrictions?
4. In order to receive break for 2017; would I need to file before Dec31,2016?

Any other insight would be most appreciated. Mahalo!

[Grassyknoll]

From what I have heard there are a number of ways to get the Ag exemption (though there are two tiers, a short and long term commitment).
I manage a company with apiaries and we place bee-hives on people's land at their request so that they can apply for the exemption.

[JohnnyHF]

Thank you for the information. Interesting approach with the bees. I'd like to hear more about cattle and fencing from anyone experienced if possible. Mahalo.

[whtviper1]

Originally Posted by JohnnyHF

1. Is the county still extending this tax break?
2. Would I have to fence the entire property to get the break?
3. Are there any time restrictions?
4. In order to receive break for 2017; would I need to file before Dec31,2016?

Any other insight would be most appreciated.

Why not ask the source - the County.

[terracore]

I applied for and was approved for the AG property tax break but I only filed because I didn't totally understand it. In my case the resident homeowners tax break was higher and you can only chose one or the other (on the same property) so I declined to take the AG. But I did learn a little about the process along the way.

There is grant money for fencing AG land and there is property tax relief for land that is actively AG, but they are completely separate. You will never recoup your cost of fencing 10 acres via a property tax exemption and the fencing grants have so many stipulations I would be surprised if anybody actually qualified for them.

The county's fiscal year isn't a calendar year and you've already missed the deadline for the first 1/2 of 2017. Call the county or google for more info.

You didn't say where your property was located. If you have big trees on either side of the fence line I wouldn't put cattle in there until you have somebody in place to watch and service the fence. They like to bolt for the taller grass on the other side of a downed fence and it doesn't take a named storm for trees to down fences.

[JohnnyHF]

Mahalo terracore for the great info and advice. Land is in Kaumana, near Hilo Hillside, thankfully no Albezias. Is the grant through county? Dept. of Ag? I do plan on building a residence there starting next year but currently reside off island. Thanks again.

[terracore]

Unfortunately, I do not remember which agency sponsored the fencing grant. There are a lot of AG grants available for those clever enough to navigate the application processes etc.

Grants aside, a bona fide farm is a business and any purchases for said business (fencing, feed, livestock, medicines, vet care, AG buildings, tree removal, etc, pretty much everything except the land itself) is a tax deduction. If you keep careful records you can even deduct livestock losses from disease, predators, escapees, etc. You can deduct your car mileage going to and from the feed store. Walmart in Hilo sells livestock food. So long as your primary reason for going was to get some livestock feed, your mileage to Hilo is deductible as is the livestock feed you buy there. And when you sell livestock, you'll need to add that to your profit/loss statement. Of course, always consult a tax professional. The IRS audits people who try to take deductions for "hobby" farming activity that isn't legitimate business activity.