Agriculture & Grazing
Property owners may apply for a special method of valuation for land if the land is used primarily for agricultural purposes or grazing. Should an owner qualify, the valuation of your land for property tax purposes will result in an assessment that is significantly lower than the market value of the property. The benefit to the property owner is a reduction of assessed valuation, thus resulting in lower taxes on the agricultural land. To be eligible for the special method of valuation for land used primarily for agricultural purposes, the property owner must demonstrate that the use of the land is primarily agricultural. The property owner must submit objective evidence that the land is used for the production of agricultural products, such as: plants, crops, trees, forest products, orchard crops, livestock, captive deer, elk, poultry or fish, and that the agricultural products were:
- Produced for sale or subsistence in whole or in part; or
- Used by others for sale or resale; or
- Used as feed, seed or breeding stock, to produce other such products which other products were to be held for sale or subsistence.
The land may also qualify if the use of the land met the requirements for payment or other compensation pursuant to a soil conservation program under an agreement with an agency of the federal government, or if the owner of the land was “resting” the land to maintain its capacity to produce such products in subsequent years. The owner may “rest” the land for up to three consecutive years.
Once land has been classified as land used primarily for agricultural purposes, no application for that classification is required for any succeeding year so long as the primary use of the land remains agricultural and land ownership has not changed. The land will retain its status for property taxation purposes in every succeeding year as land used primarily for agricultural purposes. When use of the land changes such that it is no longer used primarily for agricultural purposes, the owner of the land must report the change in use to the county assessor. If subsequently use of the land again becomes primarily agricultural, the owner must apply for classification of the land as land used primarily for agricultural purposes. When the owner of the land has not reported that the use of the land is no longer primarily for agricultural purposes but the county assessor has evidence sufficient to rebut the presumptions in the tax code (NMSA 7-36- 20), the county assessor must change the classification of the land. The owner may protest the change in classification within the yearly deadline which is 30 days after the date of mailing of the assessor’s Notice of Value.
AGRICULTURAL AND GRAZING CLASSIFICATIONS – SPECIAL USE PROPERTIES
In order to preserve the limited lands available in New Mexico for agricultural purposes and grazing, the New Mexico legislature has given special valuation status to agricultural land. (7-36-20 NMSA 1978). Qualified owners of such land must submit an application to the county assessor within 30 days of the official mailing date of the Notice of Value (typically May 1st) and must be prepared to prove that agriculture is the primary use of the land. For the purpose of this section, agricultural uses generally means the use of land for the production of plant crops, trees, forest products, orchard crops, livestock, poultry or fish. The term also includes the use of land that meets the requirements for payment of other compensation pursuant to a soil conservation program under an agreement with an agency of the federal government.
WHAT IS THE DIFFERENCE BETWEEN WET AND DRY AGRICULTURAL LAND?
As defined in NMSA 7-36- 20, wet or irrigated land is all agricultural land, of which a minimum of one acre is cultivated, and is receiving supplemental water through irrigation ditches.
WHAT IF THERE IS AN IMPROVEMENT (HOUSE) ON THE AGRICULTURAL LAND?
A minimum of one acre will be designated as a home site and will be valued at market value. A home site, as defined in the NMSA 7-36- 20-E means the site is used primarily as a residence and is more than the boundary of the foundation of an improvement used as a residence. All remaining land will receive the agricultural valuation rate providing that the primary use of the remaining land qualifies as Agricultural under the statute.
WHAT ARE THE REQUIREMENTS TO QUALIFY FOR A GRAZING CLASSIFICATION?
Grazing valuation claims require proof of the presence of at least one animal unit on a parcel meeting minimum acreage requirements and proof that the livestock has access to all of the agricultural land for the tax year. It must also be demonstrated that the parcels have adequate features to support livestock (e.g., fencing, water sources, etc.). Proof may be in the form of grazing lease, a personal property declaration of livestock that graze on the land, or some other proof of grazing use. However, grazing must be the primary use of the land in order to qualify.
The NM Tax and Revenue Department issues an order each year specifying the carrying capacity for land in each county. Carrying capacities are typically stable and generally do not change from year to year. In Grant County, there are two classes of grazing land based on carrying capacities observed throughout the county. Class A grazing land can support 8 animal units per section (640 acres) and 80 acres (enough to support one animal unit) is the minimum amount of land required to receive the special method of valuation. Class B grazing land can support 12 animal units per section (640 acres) and 53.3 acres (enough to support one animal unit) is the minimum amount of land required to receive the special method of valuation.
One animal unit is defined as one cow or five sheep or five goats.
WHAT DOES “AGRICULTURAL PRODUCTS” MEAN?
Agricultural products include: plants, crops, trees, forest products, orchard crops, livestock, wool, mohair, hides, pelts, poultry, fish, dairy products and honey.
DOES THE ASSESSOR’S OFFICE HAVE THE RIGHT TO REQUEST INCOME AND EXPENSE INFORMATION FROM A TAXPAYER WHO IS APPLYING FOR AGRICULTURAL VALUATION?
Yes. Property Tax Division Regulation 36-20:7 indicates the application form may contain a request for providing information regarding the owners farm income and farmers expense as reported to the U.S. Internal Revenue Service on Schedule F.
HOW DOES THE ASSESSOR DETERMINE WHETHER THE PRIMARY USE OF THE LAND IS AGRICULTURAL?
The determination is based on the evidence provided. No exemption will be granted if there is evidence that the land is being held for speculative land subdivision and sale; for commercial use of a non-agricultural nature; recreational use; if the land is being leased and whether or not the lessee is using it for agricultural purposes; Or any other nonagricultural use.