Tax Breaks and Property Tax Incentives for Urban Farms: Two Verified Programs
Why these programs exist
Property taxes are usually based on what land could sell for. In a city, that can be far more than a small farm earns. Some governments therefore tax urban farmland as farmland, or give a credit, in exchange for keeping the land in production. These programs are local or state choices, so they exist only where a government has adopted them.
Two examples side by side
| Point | Baltimore City | California |
|---|---|---|
| Source | City Code § 10-19, in effect since June 7, 2015 (Ordinance 15-350); definition from Maryland Tax-Property Article § 9-253. | Government Code § 51042 (Urban Agriculture Incentive Zones Act). |
| What you get | A credit: the property tax due, less any other credit, multiplied by 90 percent. | Land assessed under Revenue and Taxation Code § 422.7 for the contract period. |
| Term | 5 tax years, renewable for another 5 (apply at least 90 days before expiration). | A contract of at least 5 years. New contracts and renewals are allowed until January 1, 2029. |
| Size | No size limit stated in the section we read. | One parcel or contiguous parcels of 0.1 to 3 acres. |
| Use conditions | Must be used for urban agriculture, meet building and fire codes, and produce and sell or give away products worth $5,000 or more per tax year (unless a waiver applies). | All of the land must be in agricultural use, commercial or noncommercial. No dwellings may be built during the contract. |
| Who decides | The city, through its Sustainability Office. | A county (or city and county) sets up a zone by ordinance; a city needs county approval. |
| If you leave early | To qualify, the parcel must be in use for urban agriculture; check the code for what happens if that stops. | Early cancellation triggers a fee equal to the tax benefit received, except in extenuating circumstances. |
The Baltimore column comes from the city code. We could not open the text of the Maryland statute itself, so check how the state law and the city code work together before you apply. A 2026 bill in the Maryland legislature proposed changes to the state credit; we could not confirm whether it passed.
What this means in practice
- It is voluntary for governments. Maryland’s law, as summarized in legislative materials, lets local governments grant the credit; California’s act lets counties create zones. If yours has not, you cannot claim it.
- It trades benefits for restrictions. California bars housing on the land during the contract. Baltimore requires minimum sales.
- The paperwork has deadlines. Baltimore requires the application at least 90 days before the first tax year of the credit.
- Leaving early can cost money. California charges back the tax benefit if you cancel.
How to find out what applies to you
- Do you own the land, or lease it?Owner: property tax programs apply to you directly. Tenant: ask your landlord, because the owner usually has to apply or sign. Go to step 2.
- Has your city, county or state adopted an urban agriculture tax program?Ask the county assessor and the city planning or sustainability office. Search for terms like “urban agriculture incentive zone” and “agricultural use valuation.” Go to step 3.
- Do you meet its size, use and sales conditions?No: ask whether a waiver or another program fits. Yes: go to step 4.
- Do you know the deadlines and what happens if you stop farming?No: read the code or contract language and ask for the cancellation terms in writing. Yes: apply.
Other property tax paths
Many states have programs that tax farmland by its agricultural use. These often have minimum acreage or income tests that a small urban plot may not meet, and we have not verified the rules state by state, so ask your county assessor. Nonprofits may qualify for property tax exemptions; see our nonprofit guide. Sales tax on farm products is a separate question for your state revenue department. For the other legal decisions around a farm business, see starting a legal urban farm business.
Frequently asked questions
Do urban farms get a property tax break?
Only where the government has created one. Baltimore City and California’s incentive zones are two verified examples.
How much is the Baltimore credit?
The property tax otherwise due, after other credits, multiplied by 90 percent, for five tax years, with renewal possible.
What does a California incentive zone require?
A contract of at least five years for 0.1 to 3 acres, with the whole parcel in agricultural use and no housing built during the contract.
Can I still sign a California contract?
The act allows new contracts and renewals until January 1, 2029, but only in a county that has set up a zone.
Do I need to sell what I grow?
In Baltimore, yes, at least $5,000 of products produced and sold or given away per tax year unless a waiver applies. California’s act allows commercial or noncommercial agricultural use.
What if I rent my plot?
Ask the landlord. Property tax programs generally run through the owner, so you will need their cooperation.
Official sources
- Baltimore City Code, Article 28, § 10-19 (Ordinance 15-350, effective June 7, 2015)
- California Government Code § 51042, Urban Agriculture Incentive Zones Act (new contracts through January 1, 2029)
- Maryland Code, Tax-Property § 9-253 (definition referenced by the city code; statute text not opened)