CA Conservation Act of 1965 (“Williamson Act”) – BONUS Part 6 in my What to Know About CA Property Taxes Series

If you have been wondering what California property taxes are all about and how they stack up to the rest of the country, then you’re in the right place!

I’m my 5 week series, What to Know About CA Property Taxes, I will take you through the basics, followed by all the many things you need to know, including Mello-Roos Taxes, Supplemental Taxes, and we’ll even cover reassessment exclusions that may apply to reduce your tax bill, and in some cases, eliminate them altogether. Each week builds on each other, so make sure you start from the beginning.

In this week’s bonus article, I will be sharing some insights to some of the things I learned as an estate planning/wealth management paralegal when it comes to the Williamson Act.

This information is for those of you that own quite a bit of property (100+ acres), particularly if it’s zoned as “Agricultural Land.”

Even if you don’t fall into this category, it is interesting to know about. Especially in more rural areas such as Amador County, you may hear the “Williamson Act” thrown around sometimes. Now you can understand what they’re talking about!

This can also come in handy down the road if you ever do decide to purchase property to start a farm, or other ag business. You’d be surprised at how many people don’t know about this.

Now, let’s dive into what the CA Conservation Act of 1965, also known as the “Williamson Act” is all about.

What is the Williamson Act?

The Williamson Act was passed in 1965 to address the ever-increasing property taxes in California, particularly on land that was used for agricultural purposes. This was before Proposition 13 went into effect in 1978 but the Williamson Act remained as an important part of CA Property Tax law.   

What was happening before the Williamson Act went into effect, was that when someone owned a large piece of property, the best way to make money from owning that property was to convert it into a more urban development area. This was because property was valued for it’s potential best use.

Owning a bunch of ag land for cattle for instance, provided a lot less value than putting in something like a new construction community. This caused a lot of CA farmland to essentially disappear at alarming rates!

So, in order to start preserving some of this land, the Williamson Act was created to allow property owners that used their land for purposes other than urban development, such as owning cattle to graze, to enter into a conservation easement or in other words an “Agricultural Preserve” that restricted the use of their property for these purposes. Thereby allowing their property to be assessed based on the actual income it was generating instead of the “highest and best use” property valuation method.

How to Apply for the Williamson Act

Each area is different, so be sure to check-in with your local county or city’s planning department. In Amador County, the application can be found HERE (and scroll down to the bottom of the page where it says “Commonly Used Forms” and click on “Williamson Act”).

The application will ask for the Assessor Parcel Number(s) of your property, acres, the current agricultural uses, and compatible uses.

It will also ask for the agricultural production your property provides separated by use (e.g., dry pasture, irrigated pasture, field crops, row crops, etc.), and any other income your property generates from hunting, fishing, minerals, etc.

The application will also ask for information regarding any leases that may exist on the property, improvements to the property (such as a house, barn or other building added to the property), and the estimated income your property generates.

It may sound intimidating at first, but if you are legitimately running a farm, or other similar business on your ag land, you should be keeping track of all of this anyway!

Once Your Property is Protected Under the Williamson Act

Once you’re approved, the Williamson Act contract term lasts for 10 years (and auto-renews every year thereafter). Your property must be used for the intended purpose the entire time. Otherwise you may be getting yourself in some hot water with your local county, including some hefty fees and possible sanctions!  

If You Want to Remove or Cancel the Williamson Act Contract

If you find that you no longer want to use your property, or a portion of your property, for the intended purpose you filed your application for, then you must file a Notice of Non-Renewal Form (you may have seen this form under the original application).

Please note that this Non-Renewal period is 9-years long. Your property tax assessment will increase each year until it is back where it should be for the “highest and best use” of your property.

Depending on your local county, you also may be able to cancel your contract if you are going to use your property for another purpose. But just having the potential to use your property for a different purpose isn’t enough, you need to actually use your property for something else. There also may be a cancellation fee. Contact your local county for more information.

If You Sell Your Property Under a Williamson Act Contract

Once your property is under a Williamson Act Contract, it runs with the land. Meaning, all successors in interest (future owners) of this property are subject to the same restrictions under the Williamson Act (even your heirs would be subject to this contract if you were to pass away).

But again, check with your local county to see if they have any specific rules or requirements related to this.

My advice is if you plan to sell your property anytime soon, or it’s likely that you won’t outlive the contract (morbid I know, sorry! – but I do need to mention it), make sure to really think it through before applying for the Williamson Act because you may be limiting the potential buyers of your property (or shooting your heirs in the foot).

However, this could also be a great selling feature depending on who your most likely buyer is or could provide some great tax savings to your next of kin!

If You Add Solar Panels to Your Property

If you plan on adding solar panels to your property, there may be an exception to the Williamson Act. For further information,  please visit the Solar Use Easement page on the CA Dept. of Conservation website.

Other Conservation Options

If you plan to own your property for decades to come, you can also consider a Farmland Security Zone or (FSZ) Contract that is for a 20-year term. There are other parameters that you must meet in order to apply for an FSZ, so make sure to do your due diligence before applying.

In Amador County, we also have what’s called the Mother Lode Land Trust (“MLLT”) that is an additional way to conserve land located in the foothills from further development.

The MLLT extends all the way up to Lake Tahoe in El Dorado County through Alpine & Calaveras Counties, to Tuolumne County just North of Yosemite. Not only can it protect your property from further development, you also may be able to have tax or charitable gift benefits.

Final Notes

Now I know this can sound very confusing, which is why I highly recommend that you seek out an attorney and accountant to discuss your particular situation to see what the right move is for you to make.

I can only tell you about the various options out there. You can also visit the CA Dept. of Conservation website for more information about the Williamson Act, including frequently asked questions.

As you can see, being a homeowner in CA, although we have quite a few laws, rules, and regulations, many of them are for our benefit!

I hope you’ve enjoyed my What to Know About CA Property Taxes series! If you have any questions about CA Property Taxes or anything related to real estate, I’m here to help. Reach out anytime via email or schedule a time to talk over coffee or even via zoom. I’m not going to push you to try to sell your property every time you reach out to me so don’t worry about that!

Of course, I would love to help you when you’re ready to make a move. But I also really enjoy helping my clients long before that time. Because the more informed you are as a client, the easier it is for both of us when the time comes. Plus, you may actually find yourself enjoying the process!  

That is exactly WHY I love being a real estate agent! Buying and selling your first home is often times just as much of an emotional decision as it is a financial one. And I’m here to help you with both when you’re ready.

Surprise! Next week, I have one additional article I want to share about CA Property Taxes before I move onto my next series. There are some new property tax exemptions that you could enjoy. So stick around for next week when I’ll dive in and give you the details!