Maryland Property Tax Guide

Maryland Agricultural Use Assessment: How Buyers Keep the Farmland Tax Benefit

What the assessment is, who qualifies, and what it takes to carry the benefit through a sale and keep it for the five years that follow.

The short answerMaryland's agricultural use assessment is not a tax credit. It values actively farmed land at farm use value instead of market value, lowering the property tax. It stays with the land but does not transfer automatically. A buyer signs an Agricultural Declaration of Intent at closing and keeps the land farmed for five full taxable years. Otherwise a 3% to 5% agricultural transfer tax, plus a 25% surcharge, applies.

5 years

Full taxable years the land must stay in farm use

3% to 5%

Agricultural transfer tax if the benefit is lost

+25%

Surcharge added to the tax

+10%

Penalty if the 5-year promise is broken

Source: SDAT, Agricultural Transfer Tax; Maryland Code, Tax-Property § 13-303.

What should a buyer do to keep the agricultural assessment?

A buyer keeps the agricultural use assessment by checking the parcel before contract, getting the transfer tax exposure in writing before settlement, signing two SDAT forms at closing, and farming the land for five full years. The steps below follow SDAT's own guidance.

Before Contract

Confirm the parcel's current assessment class and acreage in SDAT records. Note how much is farmland and how much is homesite.
Look for the seller's written notice, as part of the sales contract, that the agricultural transfer tax may be due. SDAT calls payment a negotiated item. Once the notice is given, the buyer becomes responsible for the tax.
Ask the county Finance or Treasurer's Office whether the county charges its own agricultural transfer tax on top of the state tax.
Weigh future plans. Building, subdividing, rezoning or ending farm use within five years changes the math.

Before Settlement

Contact the local SDAT Assessment Office to review the eligibility rules before signing a Declaration of Intent. SDAT encourages purchasers to do this.
Request an Agricultural Transfer Tax Statement from that office so the potential exposure is known in writing.
If a house or other improvements were added, notify the office at least 7 days before the deed is recorded. SDAT applies a similar requirement when only part of the land will stay in farm use.
If only part of the land will be covered and the parcel can be subdivided, provide a survey showing the location of the covered portion.

At Closing

Sign the Agricultural Declaration of Intent: a promise to keep the described land in agricultural use for at least 5 full consecutive taxable years. Filing it waives the transfer tax.
File the Application for Agricultural Use Assessment with the Declaration. Approval depends on the land meeting the eligibility rules below.
Without these, the transfer tax and surcharge are due on the deed and must be paid before it can be recorded.

For the Next Five Years

Keep the land actually and primarily in an approved farm or woodland use.
Keep records such as sales receipts, invoices, lease agreements and Schedule F. Smaller parcels may need to show $2,500 in average gross farm income.
For woodland, keep the forest management plan current and submit proof of compliance when SDAT asks.
Ending farm activity, or building non-agricultural structures or site improvements, during the five-year term is a violation of the Declaration.

Source: SDAT, Agricultural Transfer Tax; SDAT Agricultural Use Declaration of Intent and Application for Agricultural Use Assessment.

What ends the agricultural assessment?

The agricultural assessment ends when covered land leaves farm use or stops meeting SDAT's rules. During a Declaration of Intent, that also triggers the transfer tax, surcharge and penalty.

Taking any covered land out of farm use during the 5-year term
Requesting a rezoning to a more intensive use. A rezoning started by the county does not by itself remove the assessment.
Developing or subdividing the covered acreage
Selling off a portion so the remaining land no longer qualifies
Falling short of the income test or acreage rules
Letting a woodland management plan lapse

What does it cost if the benefit is lost?

Losing the benefit costs a Maryland agricultural transfer tax of 3% to 5%, plus a 25% surcharge on the tax. A 10% penalty on the tax is added when a Declaration of Intent is violated.

Land removed from farm use	State tax rate
20 acres or more	5%
Less than 20 acres	4%
Less than 20 acres, with site improvements such as well and septic	3%
Surcharge on the tax, plus penalty on the tax if a Declaration of Intent is violated	25% + 10%

The tax is generally based on the price paid, less the value of the house, farm buildings and other non-farm land. In a violation, it is based on fair market value set by the Supervisor of Assessments, and the land is then assessed at fair market value going forward. Source: SDAT, Agricultural Transfer Tax; Maryland Code, Tax-Property § 13-303.

How much can the agricultural assessment save?

In SDAT's own example, the agricultural assessment saves $2,780 a year on a 100-acre parcel. The parcel has a market value of $3,000 per acre and an agricultural use value of $500 per acre, taxed at a combined $1.112 per $100 of assessment.

Basis	Per acre	Assessment	Annual tax
Market value	$3,000	$300,000	$3,336
Agricultural use value	$500	$50,000	$556
Annual savings			$2,780

Illustrative figures from SDAT, The Agricultural Use Assessment.

Who qualifies for the Maryland agricultural use assessment?

The assessment follows the land, not the owner. SDAT does not look at who owns the land or what the owner earns. The land must be actually and primarily used for a continuing farm or agricultural use under COMAR Title 18. Assessors weigh the type of activity, the acreage devoted to it, total parcel size, livestock counts and enrollment in programs such as CREP.

Homesites never qualify. The house is assessed at market value. Unless obviously larger, the homesite is treated as at least 1 acre.
Parcels under 3 acres qualify only in narrow cases: adjoining qualified farmland under the same owner, at least 51% of the owner's gross income from the parcel, or a Family Farm Unit.
Parcels of 3 to under 5 acres must meet a $2,500 average gross farm income test. Parcels of 5 to under 20 acres may be asked to meet it when farm activity is hard to judge. The average uses the two highest years of the last three. Rent paid for leased land does not count toward it.
Standalone woodland needs a forest management plan covering at least 5 acres, excluding the homesite, prepared by a registered professional forester. Rates are $125.00 per acre under a Forest Conservation Management Agreement and $187.50 per acre under a forest stewardship plan.

Source: SDAT, The Agricultural Use Assessment.

Frequently Asked Questions

Is Maryland's agricultural use assessment a tax credit?

No. It is an assessment class. Land in active agricultural use is valued at its farm use value rather than market value, which lowers the property tax. The Maryland State Department of Assessments and Taxation (SDAT) administers it.

Does the agricultural assessment transfer to a new owner automatically?

No. The buyer signs an Agricultural Declaration of Intent and files an Application for Agricultural Use Assessment at transfer. Without them, the agricultural transfer tax and surcharge apply and must be paid before the deed is recorded.

How long does a buyer have to keep the land in farm use?

Five full consecutive taxable years after the transfer. Removing the land from agricultural use during that time brings the transfer tax, the 25% surcharge and a 10% penalty calculated on the tax.

What is the Maryland agricultural transfer tax rate?

5% for 20 acres or more, 4% for less than 20 acres, and 3% for less than 20 acres with site improvements such as well and septic. A 25% surcharge is added. A few counties also charge their own agricultural transfer tax.

Who pays the agricultural transfer tax, buyer or seller?

The buyer, once the seller gives written notice in the sales contract that the tax may be due. SDAT describes payment as a negotiated item between the two parties.

Can a buyer keep the assessment on only part of the property?

Yes. A Declaration of Intent can cover part of the land. If the parcel can be subdivided, SDAT requires a survey showing the location of the covered portion, and the local Assessment Office should be notified ahead of settlement.

Does a house on farmland get the agricultural assessment?

No. Homesites, including tenant homesites, are assessed at market value. Unless obviously larger, SDAT treats the homesite as at least 1 acre.

Buying or Selling Land in Maryland?

FORWARD at Corcoran McEnearney advises buyers and sellers in Montgomery County and across Maryland. Marc Cashin and Cesar Rivera can walk through how the assessment affects a specific property before an offer is written.

Talk to an Advisor

More guides: Maryland real estate guides · Montgomery County guides · Montgomery County real estate · Potomac, MD · All Resources

Sources: Maryland SDAT, The Agricultural Use Assessment; SDAT, Agricultural Transfer Tax; SDAT Agricultural Use Declaration of Intent; SDAT Application for Agricultural Use Assessment; Maryland Code, Tax-Property § 13-303. Updated November 2026. General information, not tax or legal advice. Confirm with SDAT, a tax professional or an attorney before acting.