Continuation of Exempt Class : Agricultural Transfer Tax

Asked March 17, 2016, 1:03 PM EDT

I'm selling a property that has been in my family since 1979. It has enjoyed an exemption class of Agricultural Transfer Tax. I currently have 3 horses on the property of 5.97 acres. Land Use Code is Agricultural/Rural. Zoning Code is RC (rural cluster) ; Property class is A and Property use is Agricultural. The property is not in the Agricultural Reserve on the zoning map.

The buyer will have horses on the land as well. They believe that they will have to pay the transfer tax for property going from The exempt class of Agricultural Transfer Tax. I don't believe they will. What documentation can I use to prove this to them?

Montgomery County Maryland

1 Response

I would point him to my blog post on the subject-http://www.aglaw.umd.edu/blog/selling-or-buying-farmland-make-sure-you-understand-the-agricultural-use-assessment

If I understand the question correctly, the short answer is that the buyer will not have to pay the Agricultural transfer tax if the buyer intends to keep it in a qualifying agriculture use (i.e. having horses) and signs a Declaration of Intent pledging to keep it in that use for a 5 year period. One way to ensure there are no issues prior to closing is to contact the local State Department of Assessments and Taxation office and verify that the tax will not become due.