Northern California Real Estate
Recreational And Estate Properties
We have been doing this since 1976
YOUR WILLIAMSON ACT
TAX SAVINGS MAY BE IN DANGER
I CAN LOOK AT AN AERIAL MAP SHOWING WILLIAMSON ACT PROPERTIES AND IDENTIFY HUNDREDS THAT ARE OBVIOUSLY IN DANGER OF LOSING THEIR EXEMPTION DUE TO NOT PRODUCING FARM INCOME AND OR THE 50% RULE. THE COUNTY OF SONOMA SOONER OR LATER WILL WAKE UP AND LOOK AT THAT MAP. THEY WILL PROBABLY GO AFTER THOSE PROPERTIES AS THEY ARE A SOURCE OF POTENTAL INCOME.
The State used to reimburse the county for lost revenue through The Act. IT NO LONGER DOES. Many property owners have slipped out of conforming to the farming requirements. In the continuing hunt for revenue there has been several times where eliminating this break or modifying it has come up for discussion. The most logical is a much more stringent enforcement of its requirements which in the past have been nonexistent. The end result are possible penalties and the loss of the tax break which seems to be as much as a 75% reduction in taxes charged. In the 40 years I have been involved in rural and farm land I was not aware that there were actually three sections to the Williamson Act. Their differences are extreme.
California Land Conservation Act of 1965 also known as:
Williamson Act. Williamson Ag Preserve. Ag Preserve. Agricultural Preserve. Williamson Act Contract. WA.
SUB SECTION: Farmland Security Zone.
FURTHER SUB SECTION: Open Space Ag. II Contracts. Land Conservation Plan.
For simplicity I will just call it The Williamson Act or Act.
It was created in 1965 to give farmers a tax break as the rising farm land often was too valuable to farm as real estate taxes continued to rise. With it came restrictions on development and the requirement for farming income. This does not include timber production, horse boarding or other non food or fiber producing endeavors.
The tax break is a minimum of a 25% reduction in assessed value. In some cases it seems to be as much as a 75% reduction in the tax on the land, but not the structures of any sort, the dwelling unit nor the land associated with them. Each property varies in the evaluation process and I have not been able to get a clear explanation of how they do it.
WILLIAMSON ACT
It eliminates most commercial uses on the property not directly associated with farming or education related to farming.
YOU MUST PRODUCE FARM INCOME. Farm income is from food or fiber. Not horses or timber activity. Being in a land conversation trust such as the Sonoma Land trust does not eliminate the income requirement in the Williamson Act. By reducing the use of your land it should reduce your assessed value.
*50% of the land must be used continuously for agricultural or open space or a combination of that.
*FOR NON PRIME LAND $2,000 per farm plus $2.50 per acre. A 1,000 acre farm needs to produce $4,500 per year.
*FOR PRIME FARM LAND Grapes and bushes $1,000 per planted acre.
*For fruit or nut trees $300 per planted acre.
*Other none processed products $200 per acre.
*For less than 40 acres of prime agricultural land a minimum of 10 acres to a permanent crop.
*For less than 12 acres a minimum of 6 acres to a permanent crop.
It is a minimum of 100 acres and requires more intensive farming. It produces a higher % tax benefit.
OPEN SPACE AG II CONTRACTS. Minimum size is 40 AC.
Most properties that are in danger of losing their Williamson benefits will qualify for this ACT. THE ACT II DOES NOT HAVE FARM INCOME REQUIREMENT. It has the same tax saving benefits and can allow for dividing the property. You cannot farm under it. A biologist must prove it has benefits for wildlife, open space and even endangered plants. If you decide to actively farm you must go back to the regular Williamson Act.
Changing to the Open Space AG.II Contract requires hiring a Biologist and mapping services which have been running from $3,500 to $5,000. $85 per hour and half time for travel plus direct expenses. Dealing with CA Fish & Game and then following the interesting process through the county system. You pay a county fee of $3.604. A current title report should be around $1,000. Having been through the process with several properties, we seem to be the local "experts". We have set up a consulting business to help others do the same. Joelle Lombardo completes the forms and coordinates the process for you. She bills at $50 per hour. Half for travel time plus direct expenses. That has been running from $$2,000 to $5,000. It will probably take close to a year to complete the process. Costs are probably from $8,000 to $13,000.
To figure out if it is logical for you take your assessed land value and multiply it by .0125. That should be very close to what you would pay without your Williamson Act exemption. We hope you hire us to be your guide through the process.
The county has a 57 page website dealing with this process. Here we have condensed their information to one page. We try hard but we are not perfect. They showed the last revision on May 7, 2013. If you are concerned about your Williamson Act please go to their site for clarification.
Joe White
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