1. Look Into Homestead and Small Farm Tax Deductions
If you plan to create a backyard farm, it might be a good idea for you to look into potential property tax deductions. With urban sprawl taking over natural landscapes, most municipalities have incentives for people to maintain farmland. Every state, and sometimes even towns are very different from one another with their rules of what constitutes a “farm”. Keep in mind that some of these rules have become more strict as time goes on. Some older farms have been grandfathered in to the looser restrictions.
Where I live in New Jersey, we have some of the most expensive taxes in the entire country. By becoming a farm, you get a 90% discount on property taxes, so it’s totally worth it to qualify as a farm. You need a minimum of five acres, and prove that you make at least $1,000 annually selling products that were created on your farm for two years before you get any tax breaks. There is a 20-page rule book that goes over all of the eligibility requirements. Your local area will most likely have similar rules and regulations.