New Jersey Administrative Code › Title 18 - TREASURY - TAXATION › Chapter 15 - FARMLAND ASSESSMENT ACT › Subchapter 4 - VALUE OF LAND QUALIFYING FOR FARMLAND ASSESSMENT › Section 18:15-4.5 - Structures

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Structures located
				on land in agricultural or horticultural use such as a farmhouse or any other
				structure used in connection therewith are valued, assessed, and taxed by the same
				standards, methods, and procedures as other taxable structures in the taxing
				district. However, the term "structure" does not include a single-use agricultural
				or horticultural facility, as is commonly used for either storage or growing of
				crops and which is designed or constructed to be readily dismantled and can be
				marketed separately from the land and the building, such as readily dismantled
				greenhouses, hoop houses, polyhouses, grain bins, silos, or manure handling
				equipment or impoundments; or a three-sided turn-out shed used to shelter livestock
				provided there is no permanent foundation or floor, the shed is 250-square feet or
				less in area, and has no water, gas, oil, sewer, or electric connections; or
				garden-type utility shed that is 200-square feet or less, is 10 feet or less in
				height, has no water, gas, oil, sewer, or electric connections, has a floor system
				that is tied to the walls of the structure, and does not have a permanent foundation
				or floor.
(b) In the valuation and
				assessment of farm structures, the assessor shall consider those attributes of value
				which such structures have, utilizing the same standard of valuation applicable to
				all other real property. Assessors should utilize the same methodologies and
				considerations for valuing farm structures as they would other improvements within
				the taxing district, as appropriate for the nature of the structures at issue.
				Assessors shall take into consideration the following criteria for the establishment
				of value:
1. Cost less depreciation: The cost
				approach is based on the premise that the cost new of a structure is the highest
				possible value. Costs may include, in addition to materials and labor, architect,
				engineering and permit fees, surveys, and site improvement costs. From this highest
				possible value is deducted accrued depreciation--both physical deterioration and
				functional and economic obsolescence;
2.
				Alteration to existing structures: The cost of alterations or modernization to an
				existing farm structure does not necessarily add to building value. Where major
				alterations or modernization definitely increases or adds to the value of the farm
				structure, the percentage appreciation is determined by estimating the probable
				increase in sales value or the increase in remaining economic life of the
				building;
3. Specialized nature of
				buildings use: Farm structures are designed and built for specific production uses
				within agriculture. Knowledge of building types, construction quality, useful life,
				and utilization is important in determining a value. For example, machinery sheds or
				livestock barns are generally of post frame construction, may be open on one side,
				and have a gravel or stone floor. Comparisons should be made with like structures,
				that is, a three sided livestock shed should be compared with other three sided
				livestock sheds;
4. Depreciation: The
				physical condition of agricultural buildings should be compared to the near-perfect
				condition of similar new buildings, based on detailed inspection of all components.
				A depreciation schedule for farm structures shall be used in the assessment of the
				physical condition of a building;
5.
				Obsolescence: This is loss in value due to internal or external deficiencies.
i. Functional obsolescence is a loss in value due
				to the instability of the structure to perform adequately the function it is used
				for. Functional obsolescence would result if a building has limited contribution to
				a farming operation by seeing technologically obsolete, such as a dairy barn with 30
				tie-stall stanchions when the technological standard is for larger free-stall
				structures with milking parlors, or being totally unusable for the purpose for which
				it was built;
ii. Economic obsolescence
				of a structure with a specialized agricultural use is a loss in value as a result of
				impairment in utility and desirability caused by factors outside the property's
				boundaries. For example, commercial businesses dominating a former agricultural area
				leaves the remaining land under farm use uneconomical;
6. Labor and materials: Actual costs for labor and
				materials shall be considered in arriving at the value of a building. Most
				agricultural buildings constructed on farms are built using specialized farm
				building contractors or agricultural labor. For work done by farm employees, costs
				should be decreased 15 to 30 percent to reflect the proper wage rate and lower
				supervisory costs; and
7. Municipal
				zoning: Ordinances or codes may limit the use of a farm structure to agricultural
				purposes. When valuing a farm building, consideration shall be given to the
				permitted uses of the structure. The proximity of a farm structure to a farm
				dwelling shall also be taken into account since the valuation of both types of
				buildings may be adversely impacted.