Tax Criteria

Criteria Used to Qualify Land to Receive the Agricultural Use Assessment

Maryland State Department of Assessments and Taxation

(Reference: adapted from: www.dat.state.md.us/sdatweb/aguse.html, 2008)

It must be emphasized that the assessment applies to the land, not to the property owner.

The primary test used by the Department is directly related to the phrase "actively used." While the Department has published formal regulations and procedures which are available to the public, they can be summarized as follows:

(a) What is the nature of the agricultural activity? Is the land tilled or is it in pasture or woodland (see Woodland Eligibility section), or a combination?

(b) Is the agricultural activity truly a bonafide agricultural activity that is generally recognized as such by the agricultural community?

(c) Is the agricultural activity the primary use of the land or does it appear that the primary use is non-agricultural?

(d) Is the agricultural use a continuing operation or only temporary in nature?

What Are Some of the Restrictions on Receiving the Use Assessment?

The law is specific regarding those instances when the agricultural use assessment cannot be granted. For example, regardless of the agricultural activity, the land used for a homesite on the farm is not eligible. This principle applies to tenant homesites as well as the primary homesite. Unless obviously larger in size, the homesite is deemed to be one acre. Whatever the size, the homesite is valued and assessed at its market value as is all other non-agricultural land.

Another important restriction is land zoned to a more intensive use at the request of the owner or a person who had previously had an ownership interest in the land. If a rezoning occurs at the initiative of the county, the land may retain the agricultural use assessment. If the owner requests the rezoning, the use assessment must be removed.

The law also prevents granting the use assessment to relatively small parcels of land. For example, in the case of farmland, no parcel under three acres in size is eligible unless one of the following conditions are met:

(1) the land is owned by an owner of adjoining land that is receiving the farm or agricultural use assessment and the land is actively used (limited to only two parcels of less than 3 acres); or

(2) the owner receives at least 51% of the owner's gross income from the active use of the small parcel; or

(3) the parcel of less than 3 acres is a part of a "family farm unit." This term means that the owner of a larger farm may separate out of that larger parcel not more than 1 smaller parcel for each immediate family member. These smaller parcels must remain in active agricultural use, they must be contiguous to the larger parcel, and they must be owned by the immediate family member.

If the small parcel is woodland, it must be at least 5 acres in size in order to qualify.

The final restriction relates to subdivided parcels. That is, parcels of land included in a subdivision plat. Please see the Maryland State Department of Assessments and Taxation and local regulations for updated information.

What Woodland is Eligible to Receive the Agricultural Use Assessment?

The application of the agricultural use assessment to woodland is an important tool in helping to preserve Maryland's forestland. In general terms, there are two categories of woodland for assessment purposes: (1) woodland associated with a farm; (2) separate tracts of woodland. Different criteria apply to each category. When the woodland is a part of a larger parcel that is determined to be actively used for agricultural purposes, the woodland portion will normally receive the special use assessment. In this case, it is generally expected that the primary use of the parcel is for an agricultural activity. If the Department finds that only a small portion of the parcel is actually used for the agricultural activity, the use assessment may be denied unless the property owner meets the conditions outlined below.

The agricultural use assessment is available for separate tracts of woodland if the property owner obtains a management plan for the woodland. The management plan must be prepared by a professional registered forester and the property owner will be required from time to time to demonstrate compliance with the terms of the plan. The management plan may be one provided by the State Department of Natural Resources pursuant to the Forest Conservation Management Agreement or to a forest stewardship plan recognized by the Department of Natural Resources, or to a plan from a private registered forester.