How does a property become agricultural?
Agricultural property is used primarily to produce a profit from growing and selling crops or grazing animals. The property owner must apply to the Assessor's Office to have their property classified as Agricultural. Applications
may include supplementary information like receipts, leases, or Schedule F Federal Income Tax forms, showing the income from the agricultural use of the property. For a property to become classified as Agricultural, it takes 1 full year of use on properties that have adjudicated water rights or actual use for 3 consecutive years for properties with no water rights.
What happens after I apply?
The appraiser will visit the property to verify the use, and to review all of the land uses, soil types, any water rights and how the water is used, and information on the occupants of the homes. Once all of the information is verified for the proper time frame and the visit complete, the property will be changed to Agricultural.
We must value and classify properties as they exist on January 1 of every year, so if the use was verified to be active as of January 1, the property can be reclassified for the current year; if not, the change will go into effect for the next tax year. Property owners whose properties have changed classification will receive a Notice of Valuation showing the change.
How much money do I need to make; how many animals and how much land do I need to be considered Agricultural?
The State Statutes for Colorado do not require any amounts, just that the primary purpose must be for monetary profit; although they do state that freezer meat and vegetable gardens do not meet this requirement, even if the vegetables are sold for profit. The Colorado Revised Statutes also state that the only time horses qualify a property for grazing for profit is if the horses are: owned, bred, and sold for profit; working horses from a ranch; or owned by and used in an outfitting business. These favorable tax classifications were designed to aid the farmers and ranchers who put the food on all of our tables, and were not meant for incidental use. Appraisal staff will determine if the use is substantial enough to be classified as Agricultural. If a property owner disagrees with the classification, they may protest to the County Board of Equalization.
Why are Agricultural taxes less than residential or vacant land taxes?
Agricultural land is valued based on what it can produce, whereas residential and vacant lands are both valued at market value as of a base year, which is updated every 2 years. Agricultural land values are determined using an income formula that relies on 10 year averages for both commodity prices and expenses. These values are also updated every 2 years. The values range from a high of approximately $600.00 per acre for irrigated land to approximately $8.00 per acre for dry land. Agricultural land and the improvements used in the agricultural operations (barns and sheds) are taxed at 29% of their value. This is something to be considered, since a small parcel of land with large agricultural buildings may increase taxes. Vacant land is also taxed at 29% of the actual value; residential is taxed at 7.96%.
If you believe your property qualifies for classification as agricultural property, you may complete the Application for Agricultural Classification of Lands
Attach any supporting documentation with the completed application and submit it to:
La Plata County Assessor's Office
PO Box 3339
Durango, CO 81302
More info: Classification and Valuation of Agricultural Property in Colorado
Contact Carrie Woodson in the Assessor's Office with any questions, 970-382-6225.