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TAX BENEFIT: If you own a preserved farm in Pennsylvania and would like to transfer the property to a beginning farmer, you may be eligible for an exemption in paying realty transfer tax made available through the Pennsylvania Farm Bill.

Tax exemption connects new farmers with preserved land

The Realty Transfer Tax Exemption was put in place by the Pennsylvania Farm Bill.

More than 5,600 preserved farm owners will now be eligible to apply for a new Realty Transfer Tax Exemption through the Pennsylvania Farm Bill.

“We’re pleased to announce the availability of the [Pennsylvania] Farm Bill’s Realty Transfer Tax Exemption for owners of preserved farms who transfer a farm to a qualified beginner farmer,” says Russell Redding, ag secretary. “These farmers have said ‘yes’ to Pennsylvania agriculture for perpetuity, Pennsylvania is now meeting that commitment with investments and services through the [Pennsylvania] Farm Bill to secure a stronger future.”

Earlier this year, Gov. Tom Wolf signed the first-ever Pennsylvania Farm Bill that includes Act 13 — championed by state Sen. Judy Schwank — which states that realty transfer tax will not be imposed on transfers of real estate that are part of Pennsylvania’s Farmland Preservation Program if the transfer is made to a qualified beginning farmer.

Qualified beginning farmers are defined as someone who:

  • has demonstrated experience in the industry or a related field with transferrable skills.
  • has not received federal gross income from agriculture production for more than 10 years.
  • intends to engage in agricultural production in Pennsylvania.
  • has obtained written certification from the Department of Agriculture of qualified beginning farmer status.

“Access to land is one of the biggest roadblocks for new and beginning farmers,” Schwank says. “This bill helps remove a cost impediment and will be an incentive for these farmers to put more land under cultivation while also supporting our farmland preservation program.”

The Realty Transfer Tax Exemption only applies to transfers of preserved farms on or after July 1, 2019. The department will review each applicant and verify that he or she meets the definition of a qualified beginner farmer and will then provide the certification prior to settlement so the tax does not have to be paid. In the event the tax is paid, reimbursement must be sought from Department of Revenue.

To learn more about Pennsylvania’s Farmland Preservation Program, visit agriculture.pa.gov.

Source: Pennsylvania Department of Agriculture, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
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