Chapter 61A

Application for Classification
Owners Rights & Obligations under Agricultural or Horticultural Land - Ch. 61A

Information about Chapter 61A
Classified Agricultural or Horticultural Land Program
In order to qualify for and retain classification as agricultural or horticultural land under Massachusetts General Laws Chapter 61A property must consist of at least 5 contiguous acres of land under the same ownership and be “actively devoted” to agricultural or horticultural use.   Agricultural or horticultural use includes land used primarily and directly to raise animals or products derived from animals or to grow food for human or animal consumption, tobacco, plants, shrubs or forest products to sell in the regular course of business. For the land to be considered “actively devoted” to a farm use, it must have been farmed for the two fiscal years prior to the year of classification and must have produced a certain amount of sales, or have been used in a manner intended to produce that minimum amount of sales within a certain period of time. An equal amount of contiguous non-productive land may also qualify for classification.  Buildings and other structures located on the property, as well as the land on which a residence is located or regularly used for residential purposes, do not qualify for classification and will continue to be assessed a regular local property tax.

For property to be classified as agricultural or horticultural land under Chapter 61A, an owner must submit a written application to the board of assessors of the city or town in which the land is located by October 1 of the year before the start of the fiscal year for which taxation as classified land is sought, unless the city or town is undergoing a revaluation for that fiscal year. (The fiscal year of cities and towns begins July 1 and ends the following June 30.) In that case, the application deadline is extended until 30 days after the date the actual tax bills for that year are mailed. The assessors must approve or disapprove an application for classification within 3 months of the date it is filed and, if they do not act within that time, the application will be considered approved. The assessors must notify the taxpayer by certified mail whether the application has been approved or disapproved within 10 days of their decision. Classification and taxation of the land as agricultural or horticultural land under Chapter 61A will begin the following July 1, which is the start of the next fiscal year.

Owners will have to file a separate application by October 1 (or the extended deadline if applicable) each year for classification of the land to continue into the next fiscal year. It should be further understand that the land cannot be classified as agricultural or horticultural land for a fiscal year if the property owners do not comply with all application deadlines and procedures.
It should be further understand that once an application for classification has been approved, the board of assessors will record a statement at the Registry of Deeds indicating that the land has been classified as agricultural or horticultural land under Chapter 61A. That statement will constitute a lien on the land for all taxes due under Chapter 61A.  The property owner must pay all fees charged by the Registry for recording or releasing the lien.

Taxpayers must pay an annual property tax to the city or town in which the classified land is located. The tax will be assessed on the use value of the land for agricultural or horticultural purposes, rather than fair market value based on the land’s highest and best use as would be the case if the land were not classified. In determining the valuation of the land, the board of assessors will consider the range of agricultural land use values established by the Farmland Valuation Advisory Commission together with their knowledge, judgment and experience regarding farm land values.

The commercial property tax rate for the fiscal year will be applied to that value, unless the city or town has accepted a local option to apply the open space property tax rate. The tax will be due in the same number of installments and at the same time as other local property tax payments are due in the city or town. Interest will be charged on any overdue taxes at the same rate applicable to overdue local property taxes.

Please understand that the city or town has an option to purchase any classified land whenever the owner plans to sell or convert it to a residential, commercial or industrial use during a fiscal year it is classified, or within 1 full fiscal year after it is removed from classification.  The owner must notify by certified mail or hand delivery, the mayor and city council or the selectmen, assessors, planning board and conservation commission of the city or town of my intention to sell or convert the land to those uses and provide certain information regarding the intended sale or conversion. If the owner plans to sell the land, the city or town has the right to match a bona fide offer to purchase it. If the owner plans to convert it, the city or town has the right to purchase it at its fair market value, which is to be determined by an impartial appraisal. The city or town may also assign its option to a non-profit, conservation organization, the Commonwealth or any of its political subdivisions. It should be understand that an owner may not sell or convert the land until at least 120 days after they provide a notice that fully complies with the requirements of Chapter 61A or until they have been notified in writing that the option will not be exercised and the notice is recorded at the Registry of Deeds, whichever is earlier.

This option is not available to the city or town and the notice requirement does not apply if the agricultural or horticultural use is simply discontinued, or the owner plans to build a residence for his/her use, or the use of his/her spouse or his/her parents, grandparents, child, grandchild, brother or sister, the surviving spouse of any of those relatives, or an employee working full time in the agricultural or horticultural use of the land.

Please note that an owner must pay one of two alternative penalty taxes whenever any of the land is no longer used for, or maintained in, a use or condition that would qualify the land for classification as agricultural or horticultural land under Chapter 61A, forest land under Chapter 61 or recreational land under Chapter 61B. Payment of a penalty tax applies in that case whether or not the land is subject to the purchase option and notice requirement. The Taxpayer must pay a roll-back tax for a 5 year period if the use of the land changes to a non-qualifying use or condition. If the change in use or condition occurs when the land is classified, the tax will be imposed for the current fiscal year and the 4 prior years. If the land is not classified at that time, the tax will be imposed for the 5 prior years. In either case, the tax will be the difference between the amount an owner would have paid in annual property taxes on the land if it had been taxed at its fair market value and the amount of the taxes paid on the land under Chapter 61A during the same time. The roll-back tax also includes interest at the rate of 5% per year on each year’s tax savings. A roll-back tax on any of the land in classification on July 1, 2006 (fiscal year 2007) will not include interest so long as the land continues to be owned by the taxpayer, his/her spouse, parent, grandparent, child, grandchild, brother, sister or surviving spouse of any of those deceased relatives.

The owner must pay the alternative conveyance tax instead if the land is sold for or converted to a non-qualifying use within 10 years of the date it is acquired, or the earliest date of its uninterrupted agricultural or horticultural use by the owner, whichever is earlier, and the conveyance tax is greater than the roll-back tax that would be due. The conveyance tax will be equal to the conveyance tax rate applied to the sales price of the land, or if converted, to the fair market value of the land as determined by the assessors. The conveyance tax rate will be 10% if the land is sold or converted within the first year of ownership, 9% if sold or converted within the second year, and so on with the rate declining each year by one percentage point until it is 1% in the 10th year of ownership. After this 10 year period has expired, the owner will not be liable for any conveyance taxes, but will remain liable for roll-back taxes if there is a change to a non-qualifying use or condition of the land.

An owner may contest decisions made by the board of assessors to disapprove all or part of the application for classification by applying for a modification of the decision.  Owners may also contest the annual property tax or any penalty tax assessed under Chapter 61A by applying for an abatement. Applications to modify a decision or abate a tax must be made in writing and must be filed with the assessors within 30 days of the date the taxpayer is notified of the decision or tax.  If a taxpayer disagrees with the assessors’ decision, or the assessors do not act on the application, an owner may appeal to the Appellate Tax Board within 30 days of the date they are notified of the assessors’ decision, or 3 months from the date the abatement application was filed, whichever is later. If the appeal concerns the annual property tax, an owner must have paid it to maintain the appeal. It should be further understand that the assessors cannot modify any decision or grant any abatement if the owner does not comply with all application deadlines and procedures.

It is the taxpayer’s responsibility as an applicant for classification to fully understand and satisfy all requirements of Chapter 61A. They also have to certify that they will notify the board of assessors immediately in writing of any circumstances developing after this date that may cause a change in the use of the property from that described in the application for classification.