| The taxable value of agricultural land in Nebraska increased 11.2 percent last year, according to the Nebraska Department of Revenue. This follows a 6.3 percent increase in 2023 and marks the fourth consecutive year of increased taxable value of agricultural land (Figure 1).
Residential real estate, including new construction, rose by 9.2 percent. Commercial real estate recorded an increase of 7.7 percent. The total value of real estate rose by 9.6 percent. |
FIGURE 1. ANNUAL PERCENTAGE CHANGE IN THE TAX VALUE OF AGRICULTURAL LAND Source: Nebraska Department of Revenue
Figure 2 shows year-over-year changes in the taxable value of agricultural land by county. Knox and Pierce counties had the largest increases, with increases of just over 25 percent, followed by Hamilton County (+24 percent) and Dakota County (+21 percent). Four counties – Blaine, Box Butte, Cass and Cheyenne – saw slight decreases of less than one percent. The increases in farmland values are not surprising. This year’s values are based on land sales that occurred between October 1, 2020, and September 30, 2023. Figures from the USDA Economic Research Service show that the average value per acre of land increased 11 percent in 2021, 21 percent in 2022, and 13 percent in 2023. And there will be even more of them in 2025. The annual agricultural real estate report from the University of Nebraska-Lincoln’s Institute of Agricultural Economics shows that land prices have increased 14 percent this year, so expect another double-digit increase next year. FIGURE 2. PERCENTAGE CHANGE IN TAX VALUE OF AGRICULTURAL LAND, 2024 |
Source: Nebraska Department of Revenue, property tax assessment| Figure 3 shows year-over-year changes in the taxable value of residential properties in the counties. The largest increases were seen in Hooker (+45 percent), Cherry (+32 percent) and Johnson Counties (+34 percent).
Existing homes in these counties bore the brunt of the increase in value, as new construction contributed little to the increase in value. The smallest increases in value were recorded in Clay (+3 percent), Sioux (+3 percent) and Lancaster (+4 percent). |
| FIGURE 3. PERCENTAGE CHANGE IN TAX VALUE OF RESIDENTIAL PROPERTIES, 2024 |
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| Source: Nebraska Department of Revenue, property tax assessment |
| Historically, there is a strong correlation between changes in taxable value and changes in property taxes. Since 1993, the growth in the taxable value of agricultural land has averaged 6.5 percent and the growth in taxes has averaged 4.7 percent.
The correlation coefficient between changes in agricultural land values and tax changes over the period is 0.82, indicating a strong, positive relationship between the two. The conclusion: The increase in taxable values is likely to lead to higher property taxes. |
