University of Maryland Extension

Selling or Buying Farmland? Make Sure You Understand the Agricultural Use Assessment

Author: 
Sarah Everhart

Photo by Edwin Remsberg

The Agricultural Use Assessment is a reduced property tax assessment granted to either farmland or woodlands. The application of the assessment means that the land is appraised according to its current agricultural use and not according to its actual market value, which is often significantly higher.  The assessment was enacted by Maryland in 1960 and was the first of its kind in the country.  The purpose of the assessment is to give the landowner a property tax benefit to encourage keeping the land in either agriculture or forest as opposed to converting the land for development.  Sellers and buyers of farmland need to understand the Agricultural Use Assessment so they can both enjoy the financial benefits and be aware of the potential associated tax liabilities and penalties.

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