still_steamn
New member
With everything else being down, I was wondering what's going on with ag land prices lately? Still going up?
land prices lately?
- Thread starter still_steamn
- Start date
kansasbrittany
Banned
The guy I hunt on says that land prices should continue to decline for the next couple of years anyway.
kansasbrittany
Banned
And he was WRONG!! The trend that Uguide is witnessing is SD has apparently trickled to KS. This time last year my farmer friend was buying dry land for $1,000/acre. He and my dad went to an auction yesterday planning to buy 2 new quarters. He told my dad he wasn't going over $1,100/acre, but he didn't think he'd have to worry about it getting over 1,000. Well, it did. In fact it went for $2,100/acre......a heckuva lot more than he wanted to pay.
Needless to say he didn't come away with these properties. I know he wanted them bad b/c they are right in the middle of the rest of his spread and he's been waiting patiently for them to come available......I guess he's done buying land for awhile.
Needless to say he didn't come away with these properties. I know he wanted them bad b/c they are right in the middle of the rest of his spread and he's been waiting patiently for them to come available......I guess he's done buying land for awhile.
Prices
Patience, my pretties! When estate taxes kick back in full force next year - there will be many forced sales to "death taxes" as not many folks have that kind of money sitting around - and U. Sam get paid up front, in cash. Ample supplies mean lower prices - there just hasn't been that much turning over lately.
Not that I'm happy about all that - but that's what I expect to happen.
Patience, my pretties! When estate taxes kick back in full force next year - there will be many forced sales to "death taxes" as not many folks have that kind of money sitting around - and U. Sam get paid up front, in cash. Ample supplies mean lower prices - there just hasn't been that much turning over lately.
Not that I'm happy about all that - but that's what I expect to happen.
UGUIDE
Active member
DonS, do you know if death taxes affect land held in a trust? The other factor is that the recession has not hit AG. That is why land is going up in SD and elsewhere. It remains to be seen if the recession will trickle into AG but as long as grain prices remain stable I doubt it because that is where the AG cashflow is coming from.
BritChaser
Well-known member
Estate Taxes Effect on Ag Land Prices
Data I have heard discussed say that relatively few farms are affected by federal estate taxes, so I wonder if it has a significant impact on the ag land market.
Data I have heard discussed say that relatively few farms are affected by federal estate taxes, so I wonder if it has a significant impact on the ag land market.
UGUIDE
Active member
I meet my attorney on Wed and I will ask him about this matter. A trust is a vehicle to keep the estate out of probate which I believe is where most of the taxation happens.
moellermd
Super Moderator
But what happens when the land is taken out of the trust because the kids want to sell it or do not want to be parterners in a land ownership deal?
birdman652001
New member
land in pierre, sd area is averaging 20-25K an acre.. why this is.. i have no clue.. but apparently its an expensive place to live. im learning this bc i want to build my house next year and so far i have found a 2.5 acre which it used to be 40K with now reduced to 35K. its expensive!! going up if you ask me!
moellermd
Super Moderator
Thats land prices for a building lot. Not Ag land.
birdman652001
New member
that does go for it too! a guy who we do service for, paid 20K an acre for additional farm ground.
moellermd
Super Moderator
Having a tuff time buying into that. You would have to be smoking crack by the truck load to buy farm ground around Pierre for 20K.
Land Prices
The ag sector is not immune to collapse, anymore than financial, manufacturing, or retail. I do ag loans for a living, driving the market currently, is the fact that the ag market has a low base of loan to value, translation, lots of equity in the hands of farmers, when the quarter comes available in the middle of their property that they have wanted for 40 years, almost no price will discourage them, so they over pay for it, and spread the cost over the rest of the ground which they acquired years ago at a much lower cost basis. Additionally there is some flight from the stock and bond market, by both U.S. and Foreign investors to farmland as a hedge against deflation, (something virtually none of us have experienced), and also inflation, on the theory that solid assets will appreciate in an inflationary economy. Meanwhile the ground earns a better than bank CD return annually till the economy rights itself. I will also ad that current interest rates currently we are quoting 3.5% to 5.5% fixed rates, for 5-15 years. Which takes a bite out of the purchase price a little. Personally, I would be a seller at these prices, not a buyer.
The ag sector is not immune to collapse, anymore than financial, manufacturing, or retail. I do ag loans for a living, driving the market currently, is the fact that the ag market has a low base of loan to value, translation, lots of equity in the hands of farmers, when the quarter comes available in the middle of their property that they have wanted for 40 years, almost no price will discourage them, so they over pay for it, and spread the cost over the rest of the ground which they acquired years ago at a much lower cost basis. Additionally there is some flight from the stock and bond market, by both U.S. and Foreign investors to farmland as a hedge against deflation, (something virtually none of us have experienced), and also inflation, on the theory that solid assets will appreciate in an inflationary economy. Meanwhile the ground earns a better than bank CD return annually till the economy rights itself. I will also ad that current interest rates currently we are quoting 3.5% to 5.5% fixed rates, for 5-15 years. Which takes a bite out of the purchase price a little. Personally, I would be a seller at these prices, not a buyer.
landman
New member
I'm not selling, no way, not for any price. It takes years, if not decades, to get the land the way you want it. Money just can't replace the time element.
If land prices go up then its good for the heirs, if it goes down then it's good for me because I might get some more land. There is no such thing as a girl too pretty or owning too much land.
All kidding aside, I just refinanced and I love my banker!
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Trusts and Inheritance Tax
Trusts can be implemented to avoid FEDERAL death taxes, as written currently, and as written previously. ALL politicians have trusts, believe me! As far as states go, some, Kansas for instance has it's own quaint little death tax which as near as I know, cannot be avoided by any currently legal means. I am not familiar with any other states but Missouri, which has no inheritance tax. Guess where I live. I'm sure in the current tax crush, all states are thinking about having one, as well as the Federal proposal.
Trusts can be implemented to avoid FEDERAL death taxes, as written currently, and as written previously. ALL politicians have trusts, believe me! As far as states go, some, Kansas for instance has it's own quaint little death tax which as near as I know, cannot be avoided by any currently legal means. I am not familiar with any other states but Missouri, which has no inheritance tax. Guess where I live. I'm sure in the current tax crush, all states are thinking about having one, as well as the Federal proposal.
birdman652001
New member
lol. me, crack, seriously?
im serious... land here is way more expensive here, believe it or not... ill be MORE than happy to go find a FARM ground thats for sale and take a pic of their sign that says 20K per acre. i think theres even one that has 25K per acre... there are lots of rich soil here as well and its pretty close to the river.
UGUIDE
Active member
government Headquarters?
UGUIDE
Active member
I don't think so. Not a smart guy anyway. Hard to make $2500/acre ground pay in AG. Another motive possibly
Mo. Inheritance Tax
I am from the Kearney/ Liberty area, but in the county. A fiduciary tax? I am currently a trustee of several trusts, in several states, never heard of a fiduciary tax. There is a fiduciary bond, if you do not reside in the where the property is located, but this is a will/probate action, not a trust. Trustee's do not bear this requirement. If on the other hand, trust property which earns income would be required to pay income tax, or capital gains, just like any other property, or individual, for that matter. chief advantage of a trust, is you save the probate cost of some attorney, and court system siphoning off 25% of your hard earned dollars, in fees prior to giving it your beneficiaries. Misssouri also has B.O.D. Which is Beneficiary deed, which allows you to transfer property, cars, real estate, etc.upon death without probate. I don't want to hijack the topic, so I won't be taking this any further.Consult an estate planner, or estate planning attorney.
I am from the Kearney/ Liberty area, but in the county. A fiduciary tax? I am currently a trustee of several trusts, in several states, never heard of a fiduciary tax. There is a fiduciary bond, if you do not reside in the where the property is located, but this is a will/probate action, not a trust. Trustee's do not bear this requirement. If on the other hand, trust property which earns income would be required to pay income tax, or capital gains, just like any other property, or individual, for that matter. chief advantage of a trust, is you save the probate cost of some attorney, and court system siphoning off 25% of your hard earned dollars, in fees prior to giving it your beneficiaries. Misssouri also has B.O.D. Which is Beneficiary deed, which allows you to transfer property, cars, real estate, etc.upon death without probate. I don't want to hijack the topic, so I won't be taking this any further.Consult an estate planner, or estate planning attorney.