Beginning Farmer Realty Transfer Tax Exemption
Act 13 of 2019 states that realty transfer tax shall not be imposed upon a transfer of real estate that is subject to an agricultural conservation easement established under authority of the Act of June 30, 1981 (P.L. 128, No. 43), known as the “Agricultural Area Security Law,” to a qualified beginner farmer.
The Act further describes a “qualified beginner farmer” as someone that meets the following criteria:
- Has demonstrated experience in the agriculture industry or related field or has transferrable skills as determined by the Department of Agriculture.
- Has not received federal gross income from agricultural production for more than the ten most recent taxable years.
- Intends to engage in agricultural production within the borders of this Commonwealth and to provide the majority of the labor and management involved in that agricultural production.
- Has obtained written certification from the Department of Agriculture confirming qualified beginner farmer status.
To apply for “qualified beginner farmer” status, please complete the Application for Act 13 Qualified Beginner Farmer Status. The application can be printed under the “Forms” section of this page. Completed applications along with any supporting documents should be emailed to RAemail@example.com (preferred method) or mailed to the Bureau of Farmland Preservation for review & approval at the address below:
Pennsylvania Department of Agriculture
Bureau of Farmland Preservation
2301 N Cameron St
Harrisburg, PA 17110
Frequently Asked Questions
Question: Does the exemption apply to both state and local realty transfer tax?
Q: Does the exemption apply to the realty transfer tax imposed upon both the seller and the buyer?
A: Yes, the exemption applies to both the seller (grantor) and the buyer (grantee/qualified beginner farmer).
Q: When should I apply for “qualified beginner farmer” status?
A: We recommend submitting your application at least 30 days prior to going to settlement on the real estate transaction. This allows adequate time for the application to be received, reviewed and returned prior to settlement and recording. Because realty transfer tax is collected by the county Recorder of Deeds, it is important that the involved parties have the approved “qualified beginner farmer” certification at the time of recording in order to claim the exemption.
To claim the realty transfer tax exemption after receipt of written confirmation of “qualified beginner farmer” status from the Department, you will need to complete and file a Realty Transfer Tax Statement of Value (REV-183) with the Recorder of Deeds.
Q: Is there any additional information that I should provide that will help to expedite the review and approval of my application for “qualified beginner farmer” status?
A: A completed Application for Act 13 Qualified Beginner Farmer Status along with documents demonstrating experience in the ag industry or related field are required to be submitted to the Bureau.
While not required, we also request that you provide a cover letter containing the following information:
Contact information for the applicant (ie. phone number)
Mailing address where you would like the approved certification returned
Information about the property being transferred such as parcel number(s), address and acreage
Information about when the property was preserved and the name of the landowner who preserved the farm (if known)
Q: What happens if I do not receive my qualified beginner farmer status prior to settlement/recording?
A: In cases where settlement and recording occur prior to obtaining qualified beginner farmer status, the involved parties will be required to pay the realty transfer tax upon recording the transfer documents at the county Recorder of Deeds. However, they will then have the option to request a reimbursement of those fees.
If you find yourself in this situation, you may still apply for “qualified beginner farmer” status through the Department. You will need to demonstrate that you were eligible for “qualified beginner farmer” status at the time of the transfer by submitting a completed Application for Act 13 Qualified Beginner Farmer Status along with documents demonstrating experience in the ag industry or related field. Once you receive written certification from the Department confirming “qualified beginner farmer” status, you can request a refund by filing an Application for Refund PA Realty Transfer Tax (REV-1651). Any additional questions regarding the refund process should be directed to the Department of Revenue’s Realty Transfer Tax general line at (717) 783-8104.