N.J. Admin. Code § 18:15-4.5
Current through Register Vol. 56, No. 11, June 3, 2024
Section 18:15-4.5 - Structures(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; and7. 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.N.J. Admin. Code § 18:15-4.5
Amended by 49 N.J.R. 118(b), effective 1/3/2017