A3B-LancMt*r Farming, Saturday, May 23, 1992
Economist Explains Preferential Farm Tax Assessments
MANHEIM (Lancaster Co.)
County-wide reassessments have
triggered dramatic increases in the
number of acres of Pennsylvania
farmland enrolled in preferential
tax programs, according to John
Becker, an associate professor of
agricultural economics at Penn
State.
These programs can reduce
property taxes by as much as 60
percent, Becker told the Ag Issues
Forum last week, at Kreider’s
Restaurant in Manheim. The For
um is a group of fanners and agri
business leaders who meet month
ly to discuss issues facing Pen
nsylvania’s farm community.
Enrollment in the preferential
tax programs increased from just
over 500,000 acres in 1981 to
more than 3.7 million acres as of
April 1, 1991, according to Beck
er. Farmers from 42 of Pennsylva
nia’s 67 counties are enrolled.
Under Pennsylvania Act 319,
the “Clean and Green” law of
1974, farmers can ask county gov
ernments to value their land as
farmland for the purpose of com
puting real estate taxes. Another
law. Act SIS, has similar provi
sions. Most farmers who apply for
this kind of tax relief are in areas
where real estate prices are
inflated by development pres
sures. A com Held next to a hous
Joseph C. Petfer
Estate Counselor
Jeffrey C. Kltzmlller
Estate Counselor
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ing development, for example, has
a higher market value than a field
that is surrounded by other
farmland.
Market value is often a moot
issue until a county elects to reas
sess its taxable property. In Lan
caster County, for example, farm
land values are under intense pres
sure from population growth and a
relatively active real estate mark
et. However, there has been no
county-wide tax reassessment for
decades, so farmland valuations
for tax purposes are fairly low. In
fact, only two Lancaster County
farmers are enrolled under either
Act 319 or 515, for a total of 24
acres.
Participation would increase, as
it has in other counties, with a
county-wide reassessment.
Becker told the group that
under Act 319, the program most
commonly used, farmers can qual
ify for lower tax assessments on
three categories of land - that
which is used for agricultural pro
duction, in an agricultural pre
serve, or in a fores* preserve.
Land in agricultural prdduStion
must have been in use for .three
years before it can be considered;
it must consist of a parcel that is at
least 10 acres in size; or, if it is
smaller, it must produce at least
$2,000 in annual sales.
Ag preserve lands are a mini
mum of 10 acres in size, do not
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generate any income, and must be
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Forest preserves must be able to
produce salable timber products
and must be at least 10 acres in
size, unless they are part of a farm,
in which case there is no minimum
acreage requirement
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tial tax programs can become ine
ligible by changing to non-farm
uses, or by selling off part or all of
the property for non-agricultural
uses. In those cases, the legislation
has provisions that call for repay
ment, with interest, of any tax
monies that were saved by virtue
of the preferential treatment.
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