Farmland Values

Farmland will be assessed according to the farmland assessment law. The farmland assessment law directs assessing officials to value land based upon the soil types, their Productivity Indices (PI) and land use. Market value of farmland does not enter into the assessment formula.

Beginning 2015 payable 2016 the farm provision in PA 98-0109 amends section 35 ILCS 200/10-115 part (e) of the Property Tax Code. (e – the equalized assessed value per acre of farmland for each soil productivity index, which shall be 33- 1/3 of agriculture economic value, or the percentage as provided under Section 17-5; but any increase or decrease in the equalized assessed value per acre by soil productivity index shall not exceed 10% from the immediate proceeding year’s soil productivity index certified assessed value of the median cropped soil;, in tax year 2015 only, that 10% limitation shall be reduced by $5.00 per acre; "Soil productivity index" (PI) is a soil rating usually given on a per acre basis as determined by an ID soil survey. The lower the PI, the lower the expected crop yields. As PI increases so does crop yields. For per acre value determination, the Department of Revenue employs a PI scale from a low of 82 to a high 132. "Agriculture economic value" is a form of use-value of the property for agricultural purposes, is defined in the Property Tax Code (35 ILCS 200/10-115) by dividing the net return to land by the moving average of the Federal Land Bank farmland mortgage interest rate as calculated by Farmland Technical Advisory Board (FATB). The proposed "agricultural economic value" is calculated by dividing the net return to land by the five year average of the Federal Land Bank farmland mortgage interest rate as calculated by Farmland Technical Advisory Board (FTAB). The equalized assessed value is calculated by taking the agricultural economic value and multiplying it by 33.33%.