In order to encourage the productive use of agricultural land in Florida, the Florida legislature enacted Section 193.461, Florida Statutes. This statute is frequently referred to as the “Greenbelt Law.” Agricultural classification of land under the Greenbelt Law affords property owners substantially lower real property taxes compared to taxes on property classified for other purposes. The Greenbelt Law facilitates the financially viable operation of agricultural businesses by shielding agricultural property from potential property tax increases attributable to encroaching development. Given the potential for abuse of the Greenbelt Law by speculative developers, property owners must adhere to specific requirements in order to obtain and maintain the tax advantages of the agricultural classification.

Definition of Agricultural Purpose

The Greenbelt Law states that “only lands that are used primarily for bona fide agricultural purposes shall be classified agricultural.” The following sheds light on the meaning of this phrase:

1. Primary use. The land must be primarily used for agricultural purposes. If land is used for both agricultural purposes and non-agricultural purposes, only the portion of land used primarily for agricultural purposes may be classified as such for tax purposes. Hausman v. Hartog, 371 So. 2d 1036 (Fla. 1978) (permitting agricultural classification for portion used as an orange grove but denying classification for portion used as vacant land). With respect to a residence used in connection with agricultural land, Section 193.461(3)(d) provides that the portion of property containing the residence and curtilage must be assessed separately from the portion of property used for agricultural purposes.
2. Agricultural purpose. The land must be used for an agricultural purpose. According to Section 193.461(5), “the term ‘agricultural purposes’ includes, but is not limited to, horticulture [plants]; floriculture [flowers]; viticulture [grapes]; forestry; dairy; livestock; poultry; bee; pisciculture [fish], if the land is used principally for the production of tropical fish; aquaculture as defined in Section 597.0015; algaculture [algae]; sod farming; and all forms of farm products as defined in Section 823.14(3) and farm production.” The phrase “includes, but not limited to” is unambiguous and contemplates additional non-specified purposes. McLendon v. Nikolits, 211 So. 2d. 92 (Fla. 4th DCA 2017) (the term “agricultural purposes” includes aviculture, which is the raising of wild birds for sale as pets). Nonetheless, the term “agricultural purposes” is not without limitation. Beker Maritime Co. V. Perkins, 493 So. 2d 494 (Fla. 2d DCA 1986) (mining is not an agricultural purpose, but mining buffer areas leased for commercial agriculture may constitute an agricultural purpose).
3. Bona fide agricultural purpose. The landowner must be able to establish that the land is used for a bona fide agricultural purpose. According to Section 193.461(3)(b), “[t]he term ‘bona fide agricultural purposes’ means good faith commercial agricultural use of the land.” The Florida Administrative Code defines “good faith commercial agricultural use” as: “[T]he pursuit of an agricultural activity for a reasonable profit or at least upon a reasonable expectation of meeting investment cost and realizing a reasonable profit. The profit or reasonable expectation thereof must be viewed from the standpoint of the fee owner and measured in light of his investment.” Rule 12D-5.001(2), F.A.C. On this basis, property appraisers may deny the agricultural classification for hobby farms and lands used for personal use, pleasure, or sport.

Section 193.461(3)(b)1 provides a list of the following factors to determine whether an agricultural use is “bona fide”:

1. The length of time the land has been so used.
2. Whether the use has been continuous.
3. The purchase price paid.
4. Size, as it relates to specific agricultural use, but a minimum acreage may not be required for agricultural assessment.
5. Whether an indicated effort has been made to care sufficiently and adequately for the land in accordance with accepted commercial agricultural practices, including, without limitation, fertilizing, liming, tilling, mowing, reforesting, and other accepted agricultural practices.
6. Whether the land is under lease and, if so, the effective length, terms, and conditions of the lease.
7. Such other factors as may become applicable. For the purpose of construing the meaning of the phrase “such other factors as may become applicable,” Rule 12D-5.004, F.A.C. enumerates a list of additional factors for consideration.

As a result of litigation concerning whether the act of offering to sell property should result in the denial or loss of an agricultural classification, the Florida legislature amended Section 193.461(3)(b)2, Florida Statutes, as follows: “Offering property for sale does not constitute a primary use of land and may not be the basis for denying an agricultural classification if the land continues to be used primarily for bona fide agricultural purposes while it is being offered for sale.”

Applying for and Maintaining an Agricultural Classification

Landowners must initially apply for agricultural classification of their lands. The Florida Department of Revenue’s Form DR-482 is the standard application form, and Florida property appraisers may request additional information from the landowner in support of the application. Landowners should be prepared to provide detailed information to property appraisers (e.g., financial records, management plans, leases, etc.). The form must be filed on or before March 1, though extenuating circumstances may extend the deadline. If the property appraiser denies the landowner’s application for an agricultural classification, then the landowner may appeal to the value adjustment board (“VAB”) pursuant to Section 193.461(2), Florida Statutes. The landowner may file a lawsuit in circuit court to challenge an adverse VAB decision.

After the initial application of the agricultural classification is approved, each county determines whether it will require landowners to submit an annual renewal application or whether the county will waive annual renewal applications. Accordingly, it is necessary to confirm with the relevant county whether an annual renewal application is required. In all cases, the property must continue to be used for agricultural purposes or it will lose its agricultural classification. Property appraisers may investigate the use of property and collect back taxes for periods when the property was not used for agricultural purposes. The critical date for determination of the agricultural use of land is January 1 (although January 1 is not the only date upon which land should be put to an agricultural use for agricultural classification purposes).

Courts apply the “physical activity test” to determine whether the use complies with Greenbelt Law for agricultural classification purposes. Schulz v. Love PGI Partners, LP, 731 So. 2d 1270 (Fla. 1999) (considering actual physical use of land); Straughn v. Tuck, 354 So. 2d 368 (Fla. 1977) (property appraiser determined that land in its natural, unimproved state was not entitled to agricultural classification); Greenwood v. Oates, 251 So. 2d 665 (Fla. 1971) (tract contained large stands of unmerchantable timber, improvements to the land were not made for forestry purposes, and there were no forestry management operations since the purchase); Tilton v. Gardner, 52 So. 3d 771 (Fla 5th DCA 2010) (agricultural classification was denied due to lack of effort to promote regeneration after harvesting of timber, specifically by failing to leave sufficient seed trees, failing to harvest water oaks, and allowing underbrush to flourish); RH Resorts, Ltd. V. Donegan, 881 So. 2d 1152 (Fla 5th DCA 2004) (loss of agricultural classification due to evidence of development of a golf course and the lack of pine farming activities).

Practical Tips Concerning Florida’s Greenbelt Law

1. Timing of Initial Application and Renewal Applications. It is incumbent on the landowner to obtain and maintain a property’s agricultural classification. The application should be timely filed and, if denied, timely appealed. If the relevant county requires annual renewal of the agricultural classification, then the landowner should calendar renewal dates and ensure that annual renewals are timely filed.
2. Selling Land with an Agricultural Classification. In a contract for the purchase and sale of land having an agricultural classification, the seller should reserve the right to continue the seller’s agricultural use of the land until closing, and the seller should continue such agricultural use. This will help to protect the seller from denial of the agricultural classification while the property is under contract.
3. Purchasing Land for Agricultural Purposes. The purchaser of property who expects to use the property for agricultural purposes will need to file an initial application even if the property already has an agricultural classification. In addition, the purchaser should ensure compliance with the physical activity test upon closing (i.e., continued use of land for agricultural purposes).
4. Leasing. If a property owner contemplates leasing the property, the agricultural classification must be taken into consideration in the lease. For example, among other things, the lease should establish whether the lessor or the lessee will file the initial and renewal applications for the agricultural classification, require the lessee’s compliance with the physical activity test, and allocate responsibility for payment of taxes (e.g., payment of full taxes in the event the agricultural classification is denied or lost). Mackle Co. v. Metropolitan Dade County, 220 So. 2d 422 (1969) (lessee failed to use land for agricultural purposes).
5. Use of the Property. The landowner should communicate with the property appraiser early in the process to determine the applicable criteria and documentation in order to establish and maintain the agricultural classification. Once the agricultural classification has been obtained, the landowner should ensure continued agricultural use of the property. For example, timberland may require a timber management plan, periodic harvesting of timber, contracts for trees, etc.
6. Cessation of Use. If the property is no longer used for agricultural purposes, then the landowner should notify the property appraiser of such cessation. This will cause the property to lose the agricultural classification and the tax advantages thereof. Failure to timely notify the property may result in the assessment of back taxes.

Conclusion

The Greenbelt Law helps to ensure the continued viability of agricultural use of land in Florida. As discussed above, obtaining and maintaining an agricultural classification for property requires strict adherence to certain requirements.