By: James T. Johnson and Kimberly A. Martin
In May of this year, Governor Hickenlooper signed into law House Bill 11-1146, which amends the statutory definition of “agricultural land” for property tax purposes. Historically, land underlying a residence located on a parcel of property that otherwise was classified as “agricultural land” was also classified as agricultural land for property tax purposes. This classification resulted in the residence being qualified for more favorable “agricultural” property tax treatment as compared to the residential classification.
Under House Bill 11-1146, now excluded from the classification of “agricultural land” is up to two acres of land upon which a “residential improvement” is located if the residential improvement is not “integral to an agricultural operation” conducted on the land. Any such excluded land will be classified as “residential land” for property tax purposes, but the remainder of the property would retain its agricultural classification. If the residence is integral to the operation of a farm or ranch, the classification does not change. Further, vacant land or any other land upon which a residence is not located, whether or not subdivided, is not affected by this legislation.
House Bill 11-1146 will apply to the 2012 property tax year and all subsequent tax years. For a more complete discussion of this new law, see our Client Alert on the topic.