Can new farmers enable agricultural land in Vermont to be enrolled in the Use Value and Appraisal Program, otherwise known as Current Use? If yes, they enable landowners to reduce their property taxes by 88% on average.
First a quick review of why the Current Use Program is significant. Among other reasons:
1. It keeps land open and productive.
2. It enables a significant property tax benefit for the landowner.
Now to answer the above question. Yes, new farmers can enable agricultural land to be enrolled in Current Use. If the farmer owns the land, the land is presumed to be “agricultural land,” and it can be enrolled. If the farmer leases the land for a period of three years or more, it is presumed to be “agricultural land,” and it can be enrolled. To meet these criteria a farmer would need to meet the Current Use program definition of “farmer,” making at least 50% of their annual gross income from the sale of farm crops.
But what about new farmers who do not meet the definition of “farmer?”
Many new farmers work off farm jobs to make ends meet. They do not meet the definition, even when gross proceeds from the farm are significant. $15,000 in gross proceeds, for example, might seem significant. ($15,000 is enough gross income to enable farmers to access expert business planning assistance through the Vermont Farm Viability Enhancement Program) But let’s say that same farmer makes $15,001 a year off the farm. He/she is no longer a “farmer,” according to Current Use.
Then there is the land that produces $2,000. In this case, it doesn’t matter if you are a farmer or not. It doesn’t matter what a farmer really is or isn’t. It’s all about the land.
According to the statute governing the Current Use Program, 32 V.S.A. §3752: “There shall be a presumption that the land is used for agricultural purposes if: … it has produced an annual gross income from the sale of farm crops in one of two, or three of the five, calendar years preceding of at least:
(i) $2,000.00 for parcels of up to 25 acres; and
(ii) $75.00 per acre for each acre over 25, with the total income required not to exceed $5,000.00;
Emphasis on “it” is mine. The point being that the statute does not say who needs to produce the $2,000. It says “it” needs to produce $2,000. The land needs to produce $2,000. For all intensive purposes, it could be a woodchuck producing the $2,000, and the land could be enrolled as agricultural land. Could it be a new farmer who leases land, but does not meet the Current Use definition of farmer? I had a conversation a couple months back with Elizabeth Hunt, the Current Use Program Director at the Vermont Department of Taxes. She says yes, it can be a new farmer who does not yet meet the definition of bonafide farmer, who can enable the $2,000 to be made from the land. This type of new farmer might be leasing land from another farming or non-farming landowner. In this case the landowner could enroll the land and receive the tax benefit by virtue of the new farmer-tenant producing the $2,000 in gross annual sales.
To conclude, new farmers can enable the land to be enrolled in the Vermont Department of Taxes Current Use program if they are “farmers” making more than half their income from farming, or just plain people who manage smaller-than-25-acre parcels of land that produce at least $2,000 in farm sales. In turn they can enable land to stay open and productive, and allow landowners to reduce their property taxes. For more information about Current Use program guidelines and eligibility criteria, see these UVM Extension New Farmer project fact sheets or the Vermont Department of Taxes website for the Current Use Program.