Backyard trees earn Delafield resident property tax break
Agriculture designation ‘has so many loopholes’
Plant the right kinds of trees in your backyard and you could save oodles on your property tax bill, after the state Court of Appeals ruled Wednesday in favor of a Town of Delafield resident.
The court reversed a Board of Review decision that Peter Ogden no longer qualified for an agricultural classification on 12 acres of land behind his home near Pewaukee Lake.
A decision written by Judge Mark Gundrum ruled that merely growing the trees and some hay is agricultural, rejecting the town assessor’s view that there must be some commercial component to the endeavor.
Ogden owns three parcels at the site. One is the site of Ogden’s home. The
assessed value of the other two, classified as residential, was $886,000 in 2016; the agricultural assessment was just $17,100.
“The Ogdens and I are very pleased with this result,” said their attorney, Paul Zimmer. “It’s a great decision for taxpayers all around the state.”
Local governments may not agree. Curt Witynski, deputy director of the League of Wisconsin Municipalities, said the group warned about just such consequences when the Legislature first considered the ag classification about 12 years ago.
“We opposed the law for the exact reasons the Town of Delafield was struggling with here,” Witynski said. “Maybe this will put the spotlight back on the issue and force the Legislature to re-examine it.”
Ogden is president of Milwaukeebased Ogden & Co., which manages apartments, condos and commercial buildings in southeastern Wisconsin and Arizona.
Ogden and his wife bought the property in 2003. It was all classified as residential for tax purposes until 2012 when the assessor changed the classification to agricultural and agricultural forest for two of three parcels.
But in 2016, the assessor suspected the Ogdens weren’t really farming and changed it back to residential. The Ogdens appealed. After a hearing, the Board of Review voted 2-2 to sustain the residential re-classification. Waukesha County Circuit Judge Kathryn Foster upheld the board’s decision.
The Court of Appeals, however, found the board did not follow the law, which states land “devoted primarily to agricultural use” shall be classified as agricultural.
“Of great import to this case,” Gundrum wrote, “the plain language of the statute and rule refers to ‘growing’ the relevant crops — here apples, hay, and Christmas trees — not marketing, selling, or profiting from them.”
The Board of Review didn’t dispute Ogden was growing things but wrongly decided, according to the court, that growing alone didn’t make the land primarily devoted to agriculture without some related “minimal sales” or “valid economic activity.”
Even Ogden’s own attorney thought the growing had to be for a business purpose, which Ogden argued existed because it takes time for pines to grow to marketable size as Christmas trees and for apple trees to produce a sufficient crop for sale. In the meantime, Ogden was letting a farmer grow and harvest alfalfa from the land.
The town’s assessor, Jud Schultz, told the Board of Review why he questioned the validity of the agricultural classification based on business activity. He didn’t feel it was sufficiently documented like a real agricultural business would be.
“Because that is what ag use is about. Ag use is really for farmers, right? It is about farming,” Schultz told the board.
He said that in reviewing all Ogden’s documentation, “I did not get a good feeling” that if another professional reviewed his work they wouldn’t question if Ogden’s tree farm was actually being done “to obtain significant property tax savings.”
In his closing remarks to the board, Schultz said the agricultural classification, meant to help farmers, “has so many loopholes that people can take advantage.”
“I gave the Ogdens the benefit of the doubt because I let them in the ag program,” he told the board, but he felt they hadn’t followed the rules. “I’m calling them” out, he said.