How does New Jersey assess farmland?

In New Jersey, the assessment of farmland is conducted based on the farm's productivity by utilizing a special formula. This method takes into account the actual income generated from the farm as well as the operational costs associated with farming activities. The state employs the Farmland Assessment Act, which aims to promote and preserve agricultural activities by assessing farmland at its agricultural value rather than its market value.

This approach allows farmers to benefit from reduced property taxes, making it more feasible to maintain their operations. By focusing on productivity, the assessment aligns with the true economic reality of farming, which can often differ significantly from that of residential or commercial properties.

The other methods mentioned, such as using a flat rate per acre, analyzing sales data from neighboring farms, or considering the average market value of nearby properties, do not reflect the specific productivity-based assessment criteria established by state law for farmland. This agricultural value-based system supports the preservation of farming as a viable land use in New Jersey's diverse landscape.