The New Jersey farm tax exemption, formally the farmland assessment program under the Farmland Assessment Act of 1964, taxes qualifying agricultural land on its productivity value instead of its market value. To qualify, you need at least five contiguous acres in active agricultural or horticultural use, average gross sales of at least $1,000 per year on those first five acres, and a timely Form FA-1 filed with your municipal tax assessor by August 1 of the year before the tax year.
Land That Counts Toward the Five-Acre Minimum
The five acres must be contiguous and actively devoted to agriculture or horticulture. The land under and immediately around your farmhouse does not count toward the minimum.1New Jersey Department of Agriculture. Farmland Assessment Overview The land must have been in agricultural or horticultural use for the two full years before the tax year you’re applying for.2Division of Taxation. New Jersey Farmland Assessment
“Actively devoted” means the land is producing something real: crops, livestock, nursery stock, forest products, or similar goods. Open land with no production does not qualify, regardless of acreage.
Income Thresholds by Acreage and Land Type
For the first five qualifying acres, gross sales of agricultural or horticultural products must average at least $1,000 per year over the two years before the tax year in question.3Justia. New Jersey Code 54-4-23.5 – Land Deemed Actively Devoted to Agricultural, Horticultural, Woodland Use The two-year average cushions a single bad harvest or weak market year.
Beyond the first five acres, the per-acre minimum depends on what kind of land you have:
- Regular farmland (cropland, permanent pasture, most agricultural acreage): at least $5.00 per acre per year, averaged over the preceding two years.3Justia. New Jersey Code 54-4-23.5 – Land Deemed Actively Devoted to Agricultural, Horticultural, Woodland Use
- Woodland and wetland: at least $0.50 per acre, but only if the woodland is covered by a woodland management plan approved by the State Forester.3Justia. New Jersey Code 54-4-23.5 – Land Deemed Actively Devoted to Agricultural, Horticultural, Woodland Use
Woodland under an approved plan also gets a reduced $500 threshold on its first five acres, instead of the usual $1,000. The sales figures count gross receipts, soil conservation payments, livestock breeding and grazing fees, and income imputed to pastured cropland. You prove it with receipts, invoices, and production records showing actual sales of commodities like hay, vegetables, or livestock products.
Woodland Needs an Approved Management Plan
If you plan to count woodland acreage at the favorable $0.50-per-acre and $500 thresholds, the State Forester has to approve a woodland management plan for that land first. Plans approved on or after February 19, 2013, run for no more than ten years; older plans approved before that date with terms up to fifteen years stay valid until their original expiration.4Legal Information Institute. New Jersey Administrative Code 18-15-2.10 – Criteria of a Woodland Management Plan Without an approved plan in place, your woodland acres don’t qualify at the reduced rates.
How to Apply
The application is Form FA-1, the Application for Farmland Assessment, available from your municipal tax assessor’s office.5Legal Information Institute. New Jersey Administrative Code 18-15-2.2 – Forms FA-1 and FA-1 G.S. Required You file it along with the Supplemental Farmland Assessment Form (FA-1 G.S.), which lays out your gross sales figures.2Division of Taxation. New Jersey Farmland Assessment
Form FA-1 asks for a breakdown of how your land is used: harvested cropland, permanent pasture, appurtenant woodland, and other categories. You report gross sales totals that show you meet the thresholds for your acreage. If your qualifying land (excluding the homestead) is under seven acres, you also have to include a descriptive narrative of your agricultural activities and a sketch showing where on the property those activities take place, detailed enough for the assessor to verify during a site visit.5Legal Information Institute. New Jersey Administrative Code 18-15-2.2 – Forms FA-1 and FA-1 G.S. Required A separate sketch isn’t needed if you already submitted a map for a woodland management plan.
Pull together receipts, invoices, and production records for the two preceding years before you start filling out the form. Incomplete records are a common cause of problems with applications.
The August 1 Deadline and What Happens Next
Both forms must reach your municipal tax assessor on or before August 1 of the year preceding the tax year you want the assessment to apply to.2Division of Taxation. New Jersey Farmland Assessment Miss the date and you lose the benefit for that entire tax year. Treat it as an annual calendar item.
After filing, the assessor typically inspects the property to confirm the land use matches your description. If the application checks out, farmland assessment status goes on the tax rolls. The land also has to stay in agricultural or horticultural use through the end of the tax year you applied for.2Division of Taxation. New Jersey Farmland Assessment Filing in July and shutting down farming in October will cause trouble.
Rollback Taxes When the Use Changes
If land that has been receiving farmland assessment is converted to a non-agricultural use, the owner owes rollback taxes. These equal the difference between the reduced taxes actually paid under farmland assessment and the taxes that would have been owed at the full assessed value for other land in the taxing district.2Division of Taxation. New Jersey Farmland Assessment
Rollback covers the year the change in use occurs plus up to two preceding tax years, limited to years when the land was actually assessed under the program.2Division of Taxation. New Jersey Farmland Assessment On land that has been in the program for decades, three years of back taxes at full market value can produce a large bill. Run the number before you sign anything with a developer or rezone a portion of the farm.
A few situations don’t trigger rollback. Sales to the State of New Jersey, a local government unit, or a qualifying tax-exempt nonprofit for recreation and conservation purposes do not generate rollback taxes. Neither does a straight change in ownership, as long as the new owner keeps farming the land.2Division of Taxation. New Jersey Farmland Assessment The trigger is a change in use, not a change in owner.
If Your Application Is Denied
When the assessor disallows your application, you get written notice stating the reasons. You can appeal to the county board of taxation by April 1 or within 45 days of the date bulk mailing of assessment notifications is completed in your taxing district, whichever is later. If the property’s assessed valuation is more than $1,000,000, you can file directly in the New Jersey Tax Court.6Legal Information Institute. New Jersey Administrative Code 18-15-3.6 – Notice of Disallowance of Claim The denial stands unless you file within the window; let the deadline pass and you accept the full tax assessment for that year.