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"Green Acres" Tax Law
Minnesota law requires assessors to value property at its estimated market value. Market value reflects the greatest potential
use of the land, known as the "highest and best use". This is the use of the land that will bring the greatest economic return over
a given time. In other words, the most profitable legal use that the land can be adapted to.
The Legislature realized that this method of valuing agricultural property was actually forcing farmers off their land in certain
situations. Recognizing the importance of preserving farms in Minnesota, they developed a mechanism that allows qualifying farmers
to pay real estate taxes based upon the agricultural value of their land. This law, officially known as the "Agricultural Property
Tax" law, is commonly referred to as Green Acres and can be found in Minnesota Statutes, section 273.111.
There are a number of factors that can cause property values to escalate, including urban sprawl, proximity to a lake or
development of a freeway past the property.
The assessor determines two values on Green Acres property:
- The "actual market value" based on sales of similar property taking into consideration all of the non-farm factors that influence its market value.
- The "agricultural value" or "Green Acres value" based on sales of agricultural property in neighboring counties or areas not affected be development pressures.
Taxes are calculated on both market values, but paid on the lower, agricultural value each year. The difference between the tax
calculated on agricultural market value and the actual market value is deferred until the property is sold or no longer qualifies
for the Green Acres program.
When the property is sold or no longer qualifies, the deferred tax (the difference between the agricultural tax and the tax
based on highest and best use) must be paid to the county for a maximum of three years.
Special local assessments are deferred while the property qualifies for Green Acres. However, when the property sells, all
deferred special assessments are due.
If you own property that is used primarily for agricultural use, you may be eligible for the Green Acres program. The
- be "devoted to the production for sale of agricultural products";
- be at least 10 acres in size or a nursery or greenhouse;
- produce an agricultural income of at least $300 plus $10 per tillable acre or at least 33 1/3% of the family income of the owner is derived from the farm; and
- be the homestead; be farmed in conjunction with the homestead property; or the property must have been in the applicant's family for at least seven years.
Green Acres applications are made to and approved be the county assessor. Proper documentation to verify agricultural
income must be submitted with the application. Application forms are available on-line or at the county assessor's office,
and must be filed by May 1 in order to receive consideration for the next tax payable year.
If a property enrolled in Green Acres is sold to another person who may qualify for continuation of the Green Acres program,
the new owner must apply to the county assessor within thirty days of their purchase.
If you have further question, please contact Becker County Assessor's office at 218-846-7300.