Agricultural Use Exemption

Disclaimer

This publication does not constitute tax, legal or other advice.  It is intended as a guide only, and the application of its contents to a specific situation will depend on the circumstances involved. This publication should not be relied on as a substitute for obtaining professional advice or for researching the specific sources of authority cited herein.

Definition of Agricultural Real Property.

To qualify as agricultural real property, real property must be “actually used for agricultural purposes.” This means that the property must be currently used for bona fide agricultural purposes. Intended or future use is not determinative.

(SC Code §12-43-220(d);See also SC Commission Decision 92-77. 10 SCRegs. 117-1780.1; SC Commission Decision 92-77.)

Agricultural real property is defined as “any tract of real property which is used to raise,

harvest or store crops, feed, breed or manage livestock, or to produce plants, trees, fowl or

animals useful to man, including the preparation of the products raised thereon for man’s

use and disposed of by marketing or other means.”

SC Code §12-43-230

 

Additional Requirements for Agricultural Real Property

provides additional requirements that must be met in order for real property to qualify as

agricultural real property. The requirements are as follows:

  1. Timberland: If the tract is used to grow timber, the tract must be five acres or more.

Tracts of timberland of fewer than five acres qualify if they are contiguous to, or are

under the same management system as, a tract of timberland that meets the minimum

acreage requirement. Tracts of timberland of fewer than five acres are eligible to be

agricultural real property if they are owned in combination with other tracts of

agricultural real property that are not timberlands but qualify as agricultural real

property. Tracts of timberland must be devoted actively to growing trees for

commercial use.

2. Christmas Trees: A tract devoted to growing Christmas trees must be five acres or

more. If the tract is fewer than five acres, it will qualify as agricultural real property

if at least $1,000 of gross farm income was reported for at least three of the last five

tax years.

3. Other Acreage: All other tracts must be at least ten acres or more. Tracts of fewer

than ten acres qualify as agricultural real property if they are contiguous to other

tracts that total at least ten acres when combined. Tracts that do not meet this

requirement will qualify if at least $1,000 of gross farm income was reported for at

least three of the last five tax years.

4. New Ownership: A new owner may qualify a non-timberland tract of fewer than ten

acres if he earns at least $1,000 of gross farm income in at least three of the first five

years of ownership. If the new owner fails this requirement, the tract is not

considered agricultural real property and is subject to the rollback tax.

( SC Code §12-43-232)

10 SC Regs. 117-1780.1 further defines agricultural real property. It provides six nonexclusive

factors to be considered by county assessors in determining whether the tract in

question is bona fide agricultural real property:

(1) the nature of the terrain;

(2) the density

of the marketable product (timber, etc.) on the land;

(3) the past usage of the land;

(4) the economic merchantability of the agricultural product;

(5) the use or not of recognized care, cultivation, harvesting and like practices applicable to the product involved, and any

implemented plans thereof; and

(6) the business or occupation of the landowner or lessee, provided that purchase for investment purposes does not disqualify a tract if it is actually

used for agricultural purposes.

The following uses of real property do not qualify as agricultural:

(1) recreation;

(2) hunting clubs;

(3) fishing clubs;

(4) vacant land lying dormant; or

(5) any other similar use.

(10 SC Regs. 117-1780.1)

NOTE: See next section on Roll Back Taxes to explain how up to five years taxes may apply when agricultural real property use class is changed to a new use such as subdivision or commercial use.


Review the entire statute of Title 12, Chapter 43, Section 230 on the SC Statehouse website:
https://www.scstatehouse.gov/code/t12c043.php#12-43-230