A six-decade-old tax break intended to help struggling farmers in the Garden State has long been a target of critics who say it’s been co-opted by wealthy suburban landowners. Now, there’s a push to tighten its loopholes.
New Jersey lawmakers approved the Farmland Assessment Act of 1964 to help farms that were being squeezed out of business as demand for suburban housing drove up land values — and the taxes that went with them.
Today, about 35,000 landowners enroll some part of their properties in the program, which can discount a real estate tax bill by up to 98%.
Complaints about alleged abuses have been around almost as long as the program itself. In her 1993 race for governor, Christine Whitman faced criticism for farm assessments on two family properties in Central Jersey, though she won the election anyway. More recently, NJ Transit CEO Kevin Corbett took flak in 2019 for claiming a tax break based on a flock of sheep kept at his Mendham Township home.
Honey for sale outside a property in Bernardsville that gets a farmland assessment tax break. State law requires owners to sell $1,000 a year of agricultural products to claim the break, but reporting is on the honor system.
The state revised the law in 2013, requiring more farming revenue to qualify and more training for local tax assessors.
But critics say the changes haven’t gone nearly far enough, and a review this summer by The Record and Northersey.com of just who receives farmland assessments reveals that the breaks are still used by many wealthy landowners living on luxury suburban estates that seem to have little to do with commercial agriculture.
“The size of that program is a red flag,” said state Sen. Joe Pennacchio, a Morris County Republican who is pushing for a commission to reevaluate the program.
“I’m not against it,” he said. “But what I don’t want is people gaming the system, forcing other people to pay more tax, which is what is driving people out of this state.”
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Getting a farmland tax assessment in NJ is easy
Obtaining a farmland assessment is simple in New Jersey — if you own enough land. Property owners must fill out an annual form attesting they have set aside 5 acres or more for agricultural purposes and that they expect to make at least $1,000 from that activity. (Taxes are reduced only on the agricultural portion of a parcel; homes and other non-farming uses are taxed at…
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