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Wanting to buy property...

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From: Michael Asher
City:
Loraine, IL
Hi, thank you for offering this service to ask questions. I hope it will be helpful. I live in Adams County, Illinois. For years I have wondered if it would be possible for me to buy a farm from my grandmother. The farm is 145 acres, of which approximately 60 acres is timber. From what I've heard, my grandmother has been "grand-fathered" into a low tax rate, but should the property ever change hands, some forest management would need to take place in order for the property to keep a "farming" classification as opposed to a "recreational" one. My question is, IS IT POSSIBLE FOR ME TO BE ABLE TO SET UP SOME SORT OF "TIMBER HARVEST" TO RAISE MONEY TO BUY THE FARM WHILE AT THE SAME TIME, ENSURING THAT MY LAND TAXES WOULD NOT BE THROUGH THE ROOF? This is taking into account, of course, that I would be able clear these plans with my grandmother and more importantly a bank. Thanks in advance for any advice you can offer on this subject. I apologize if any of these details don't make sense or don't sound right. I am kind of operating under the idea of things that I THINK I know, but may be way off base. Thanks!

 
Extension Message
From: Jay Hayek
Extension Specialist, Forestry
Department of Natural Resources and Environmental Sciences
jhayek@illinois.edu
Greetings Michael:

According to the Illinois Department of Revenue, forest land that is part of a larger farming operation (% forest land is < than % cropland) should be taxed as "other farmland". Therefore, the property taxes upon inheritance or acquisition should not escalate "through the roof". Additionally, the development of an IL Dept. of Natural Resources approved forest management plan fore the forested acreage will most certainly guarantee you the lowest possible preferential property tax assessment on the forested acreage.

Rather than regurgitate IL property tax law, please visit the Illinois Department of Revenue's Website with regard to woodland tax valuation:

http://www.revenue.state.il.us/Publications/Pubs/Pub-135.pdf

Hope this helped!

 
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