"Fake farmers" or small part-time producers? (Trenton, Asbury Park: real estate, how much)

[Badfish740]

Originally Posted by marc515

3. Get a handle on people who are abusing the "Farm Tax Program". Check out the Asbury Park Press Article "Fake farmers' cost New Jersey taxpayers millions; Investigation finds wealthy property owners can exploit the law with ease"

'Fake farmers' cost New Jersey taxpayers millions | APP.com | Asbury Park Press

I was going to post this as a reply to the "how do you lower property taxes thread," but I thought it would be an interesting standalone topic. I'll be honest, this hoopla worries me a bit. Yes, there are wealthy people who own lots of land who get it either farm or woodland assessed in order to get a tax break, but it's not as bad or egregious as it seems. You can only get land farm or woodland assessed that does not have a house or areas associated with the house (like a yard, detached garage, basketball court, driveway, etc...) on it. Basically if you have a 10 acre piece of land and the house and everything associated with it occupies 1 of those acres, you pay whatever the customary tax rate is on that home with 1 acre. The remaining 9 acres are taxed at the farmland or woodland rate. If you're a millionaire with a multi-million dollar mansion in this situation you're still paying a lot in property taxes on your home and the land it occupies (tens of thousands of dollars per year in many cases)-you're just getting a break on any additional undeveloped land adjoining it. Finally, the key word with farmland assessment and woodland assessment is "undeveloped." If someone has land in farm assessment it doesn't need public water or sewer facilities, and rarely if ever needs police protection or fire protection. Undeveloped land does contribute to traffic congestion or school overcrowding either.

Of course, I'm no millionaire, so why should I care? I care because our legislature has a pretty long track record of good intentions and bad outcomes. If the outcry about "fake farmers" continues I believe that the legislature will act and probably end up hurting small family farmers in the end. The large (100 acre+) row-crop operations that produce corn, soybeans, alfalfa, etc...will be fine, but the small part time producers of everything from meat and dairy goats, to lumber and firewood, to maple syrup, to honey will be run out of business by high property taxes. My wife and plan to one day purchase 20-30 acres here in New Jersey in order to do some of the things mentioned above and more as part time farmers. Some may see the words "part time" and "farmer" and infer that we're trying to skirt property taxes. On the contrary, we wish to be self sufficient and to "live off of our land" as much as possible by raising our own poultry for eggs and meat, cutting our own firewood for heating fuel, and so on. Not to mention the fact that this is the way we're choosing to raise our children. To address another thread on this board I would rather have my children involved in 4H, hunting, fishing, and hiking than going to "Pimp and Ho" parties. In fact I saw a property like this recently sell in Kingwood (Hunterdon County) for $500,000 (30 acres with a 3 bedroom ranch and outbuildings) that was farm assessed-the taxes were still $9000-I wouldn't call that "skirting taxes."

I'm curious what other people think about this issue. Obviously no one likes property taxes and everyone wants them to be lower, but I sense some jealous anger out there with urban and suburban taxpayers saying "if I can't have it, neither should you." Keep in mind also that if these tax breaks are eliminated it may just prompt many people who hold land in farm and woodland assessment to simply sell it off rather than pay the taxes. With no tax breaks to be had, guess who will be buying? Developers of course. So much for the garden state...

[bradykp]

i read the article and initially felt like people were taking advantage of it. i'm sure some people are, but after thinking about it, i think it still makes sense. the law is helping to save farmland and prevent land from being developed, which seems like it's purpose. at the same time, some people enjoy taking advantage of it by doing the bare minimum required to get the assessment.

on another note - i was at a beer and cheese event this week, and one of the cheese selections is from a farm in oregon where the lady has something like 10 goats. very small production, sells the cheese she makes. so it's not safe to assume that people are simply taking advantage. maybe they do it part time, or as a hobby, and a side benefit is the assessment benefit. but the law is still achieving the point of keeping more agricultural land.

as for "no one likes property taxes" - i disagree. i'm perfectly ok with paying taxes to receive benefits from the government. too many people want to skirt taxes and still get the services. you can't have it both ways though.

[Badfish740]

Originally Posted by bradykp

i read the article and initially felt like people were taking advantage of it. i'm sure some people are, but after thinking about it, i think it still makes sense. the law is helping to save farmland and prevent land from being developed, which seems like it's purpose. at the same time, some people enjoy taking advantage of it by doing the bare minimum required to get the assessment.

Today the Trentonian published some examples of wealthy people from New Jersey, how much land they own, and how much property tax they pay on just the undeveloped land (in other words, not what they also pay on their homes which are unaffected by farmland or woodland assessment) and sure, there are people who own 50 acres of woods Morris County who only pay $150 per year in taxes. That riles people up because they only see two things-the amount of land the tax bill-not what's on it (or more importantly what's not on it). The other way to look at this is that in many ways its a tax incentive to not sell off land en mass to developers. Whether you agree with the tax structure or not, the fact remains that the land is undeveloped and there is that much less strain on our infrastructure and schools.

Originally Posted by bradykp

on another note - i was at a beer and cheese event this week, and one of the cheese selections is from a farm in oregon where the lady has something like 10 goats. very small production, sells the cheese she makes. so it's not safe to assume that people are simply taking advantage. maybe they do it part time, or as a hobby, and a side benefit is the assessment benefit. but the law is still achieving the point of keeping more agricultural land.

There are people like this all over Hunterdon, Warren, and Sussex Counties who sell to local restaurants and residents. We hold no illusions that we're going to get rich selling eggs, chickens, turkeys, or firewood-it's a lifestyle choice we're making. So long as I can make enough money to pay for what we consume ourselves (ie: the chickens, etc...we sell should pay for the feed and other associated costs of what we keep) I'll be happy.

Originally Posted by bradykp

as for "no one likes property taxes" - i disagree. i'm perfectly ok with paying taxes to receive benefits from the government. too many people want to skirt taxes and still get the services. you can't have it both ways though.

Fine, no one likes excessive property taxes. My wife is a teacher and I am a federal employee so don't get the impression that I'm railing against ALL taxes. In our town we pay very high taxes because of some questionable real estate deals that were made before we moved here. We pay nearly $7000 a year for a 2 bedroom/one bathroom house on a 1/4 acre which I think is excessive. Yes, we do have our own police, fire, and EMS which is nice, but we still have to pay nearly $200 a quarter for garbage pickup.

[bradykp]

true true badfish. i read the story you refer to. yes, the land is undeveloped. less straing, less required services. i agree.

$7k is high for 2 bedroom. i'm just under $10k for a 4 bedroom, but i'm also on smaller land.