2013-03-07 / Ag News

Ag land values set for 2013 tax year

Agricultural land in Emmons County will increase 13 percent for the 2013 tax assessment.

Upon a recommendation by Ann Bernhardt, tax director, the Emmons County Commissioners chose a lower increase than the 15 percent calculated by the state. Counties are allowed a small amount of leeway.

Under state law, land valuations are determined each year by the Agricultural Economics Department at North Dakota State University based on the North Dakota Land Valuation Model. The valuations are released by NDSU each December and used by the local Tax Director/ Assessor to determine the increase or decrease. Those with questions regarding the increase are advised to visit with legislators.

The model used by NDSU calculates ag land values as the landowner’s share of gross returns, based on a eight year average, (2002-2011), excluding the high and low year) divided by the capitalization rate. The capitalization rate is an interest rate that reflects the general market rate of interest adjusted for the risk associated with ag land loans. The average rate of interest on mortgage loans made in North Dakota in 2011 was 4.34 percent. This yields a capitalization rate of 5.488 percent.

The cost of production index is now up to 1.5527. This is having a significant impact on estimated land values.

The state statute mandates that the Department of Agribusiness and Applied Economics at NDSU annually computes and estimates the average value per acre of agricultural lands on a statewide and countywide basis, and the average value per acre for cropland and non-cropland. The estimates are then given to the State Tax Department.

The average value of all agricultural land in North Dakota is $496.59 per acre, up from last year’s $452.47, while cropland is valued at $662.65 per acre, also up from 604.51, and non-cropland at $128.95 per acre, which is an increase from last year’s 121.92.

According to statistics from State Tax Commissioner Cory Fong, Emmons County “all ag land” is valued at $419.58 per acre for tax purposes for 2013. Cropland in Emmons County is valued at $627.72 per acre and noncropland at $130.79 per acre.

Last year the values per acre for Emmons County were $366.20 for all ag land, $541.52 for cropland and $123.76 for non-cropland.

Values for all ag land in area counties include (last year in parenthesis) McIntosh $410.13 ($329.94), Logan $345.85 ($305.66), Burleigh $318.95 ($288.97), Dickey $706.03 ($553.86) and Kidder $314.22 ($289.30).

Return to top