Maryland Assessment Procedure Manual

Category:	Real Property
Category No.:	019
Subject:	Agricultural Transfer Tax
Subject No.:	075
Topic:	Rate of Tax and Consideration or Appraisal Value
Topic No.:	12
Date Issued:	3/11/1998
Revision Date:	8/23/2016
The rate of agricultural transfer tax is determined by the size of the land which will no longer receive the agricultural use assessment. 1. The rate is 3 percent for a transfer of less than 20 acres of agricultural land being removed from agricultural use with either or both of the following included in the sale price of the lot or parcel: (a) Structures or other items that are separately assessed by the Department;* or (b) Site improvements, for example, street, curb, sewer, water, septic, and well. 2. The rate is 4 percent for a transfer of less than 20 acres of unimproved agricultural land being removed from agricultural use. 3. The rate is 5 percent when 20 or more acres being removed from agricultural use. Example # 1- A vacant 20 acre parcel of agriculturally assessed land is transferred. The buyer does not intend to continue to farm the property. Since 20 or more acres are being removed from agricultural use, the agricultural transfer tax rate is 5%. Example #2 -A vacant 20 acre parcel of agricultural land is transferred and the buyer has stated his desire to pay the agricultural transfer tax on a one acre homesite and continue to farm the remaining land. Since one acre is being removed from agricultural use, the agricultural transfer tax rate is 4%. The buyer submits both a Declaration of Intent and an Application for Agricultural Use Assessment. The rates above are determined by the size and stage of development of the land being removed from agricultural use. The original transferred parcel (parent account) or lot size does not control the applicable rate. The agricultural transfer tax rate is: Normally applied to the consideration at the time of transfer. A Supervisor of Assessments may question and estimate the consideration for agricultural transfer tax calculation if the consideration presented at transfer is clearly not market value. This is not done for family sales with zero consideration. Applied to the Supervisor’s appraisal value as of the most recent July 1 when a violation of a letter of intent occurs. The agricultural transfer tax and penalty (10%) is calculated using the value based on the portion of the land that fails to comply with the declaration of intent. The value appraised for the most recent July 1, is based on the stage of development of the land at the time of the violation of the letter of intent. The consideration or rate of tax is not controlled by the original parcel (parent account) or lot transfer at the time the letter of intent was signed. The 10% penalty for violating the letter of intent is charged when a portion or the entire original parcel is removed from agricultural use. The penalty is only on the value of that portion removed from agricultural use. * In the rare case when a parcel less than 20 acres has only a minimally valued agricultural structure, the rate is 4% for a transfer.

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