If you own farmland or ranch land in California, you have probably heard of the Williamson Act. It is the program that lets agricultural landowners cut their property tax bill in exchange for keeping their land in farming or open space. The trade can save a lot of money, but it also limits what you can do with your land, and getting out of it is not simple.

This guide explains what the Williamson Act is, how the tax benefit works, what the contract restricts, and the two main ways to end it. Our land use and real estate attorneys at Kassouni Law advise landowners on agricultural land rights, so the aim here is to give you a clear picture before you sign a contract or try to exit one.

What Is the Williamson Act?

The Williamson Act is the common name for the California Land Conservation Act of 1965, found at Government Code Section 51200 and following. Its purpose is to slow down the loss of farmland to development. It does this by letting cities and counties enter into voluntary contracts with landowners who agree to keep their land in agricultural or open space use. In return, the land is taxed based on what it earns as farmland, not on what it could sell for if developed.

Local participation is optional, but most agricultural counties take part. The state agency that oversees the program is the California Department of Conservation, which keeps a helpful overview of the Williamson Act.

How the Contract and the Tax Break Work

A Williamson Act contract is a rolling 10-year agreement. Each year, unless someone gives notice to stop it, another year is automatically added, so the contract stays at a 10-year term going forward. That automatic renewal is a key feature, because it means the clock to exit does not start until you take action.

The benefit is on the property tax side. Normally, property is assessed near its market value. Under a Williamson Act contract, the county assessor values your land based on its actual agricultural use, usually by looking at the income the farming operation can produce. For land that would be worth far more if it could be developed, this restricted value can be much lower, and the tax savings can be significant year after year.

What the Williamson Act Restricts

The savings come with strings. While the contract is in force, the land must stay in agricultural or compatible open space use. That means you generally cannot build a housing subdivision, put up commercial buildings, or split the land into small residential parcels. Uses that conflict with farming are not allowed, and even some compatible uses need county approval.

These restrictions are exactly what makes the program work, but they also limit your flexibility. If your long-term plan involves developing the land, a Williamson Act contract can stand in the way, which is why the exit rules matter so much.

A Bit of History, and Why It Still Matters

The Williamson Act has been around since 1965, and for much of that time the state helped counties shoulder the cost. Because contracts lower local property tax revenue, the state used to send counties subvention payments to make up part of the difference. Those payments were largely cut during state budget shortfalls more than a decade ago. Most counties kept their programs going anyway, but the funding history is worth knowing, because it shaped how aggressively some counties review new contracts and cancellation requests today. Millions of acres of California farmland remain under Williamson Act protection, so the program is still a central part of how the state balances agriculture and growth.

How to End a Williamson Act Contract

There are two main paths out, and they are very different.

Nonrenewal

Nonrenewal is the standard, lower-cost way to exit. You file a notice of nonrenewal with the county, which stops the automatic yearly renewal. The remaining term, usually nine years on a contract that started at ten, then runs out. During that period, the tax assessment climbs each year until it reaches the normal level by the end. There is no separate fee, but you have to wait out the term, so nonrenewal rewards planning ahead.

Cancellation

Cancellation is the faster but far more demanding path. A landowner petitions the county to cancel the contract immediately. The board of supervisors can approve it only if it makes specific findings required by statute, and simply wanting a more profitable use is not enough. If cancellation is approved, the landowner must pay a cancellation fee equal to 12.5 percent of the unrestricted fair market value of the property. For a Farmland Security Zone contract, which is a stricter version of the program, the fee doubles to 25 percent. Because the bar for findings is high and the fee is large, cancellations are relatively rare.

Other Ways a Contract Can End

A Williamson Act contract can also end through events outside the usual process. If a public agency takes the land through eminent domain, the contract is terminated as part of the taking. City annexation can end a contract in limited cases. And the Legislature has created narrow paths, such as solar use easements on marginal land, to allow certain renewable energy projects. The tension between farmland protection and solar development has produced a number of disputes in recent years.

What It Means for Your Agricultural Land Rights

The Williamson Act is a good deal for owners who plan to keep farming, because it lowers taxes and helps preserve agricultural land. It is a harder fit for owners who may want to develop, subdivide, or sell for non-agricultural use, because the restrictions bind the land and the exit can be slow or expensive. The right choice depends on your goals, your timeline, and the value of your property if it were not restricted.

Before you sign a new contract, file a nonrenewal notice, or petition for cancellation, it is worth getting advice on how the rules apply to your specific parcel. Kassouni Law advises landowners on land use, zoning, development, and property rights issues, and represents private owners against government agencies, never the other way around. You can review our results or contact our Sacramento and Los Angeles offices to talk through your options.

Frequently Asked Questions

What is the Williamson Act in simple terms?

The Williamson Act, formally the California Land Conservation Act of 1965, lets agricultural landowners sign a contract to keep their land in farming or open space. In return, the land is taxed based on its farming use rather than its market value, which usually lowers the property tax bill.

How much does the Williamson Act lower property taxes?

There is no fixed percentage. The county assessor values the land on its actual agricultural use, often based on farm income, instead of its market value. For land that would be worth much more if developed, the restricted value and the tax savings can be substantial.

How do I get out of a Williamson Act contract?

There are two main ways. Nonrenewal stops the automatic yearly renewal and lets the remaining term, usually nine years, run out with no fee. Cancellation ends the contract immediately but requires the county to make specific statutory findings and the owner to pay a cancellation fee.

What is the Williamson Act cancellation fee?

The cancellation fee is 12.5 percent of the unrestricted fair market value of the property. For a Farmland Security Zone contract, which is a stricter version of the program, the fee is 25 percent. The county assessor sets the valuation used to calculate it.

Can I build a house on Williamson Act land?

Generally not a subdivision or non-agricultural development. While the contract is in force, the land must stay in agricultural or compatible open space use, so building a housing development or splitting the land into small residential lots is usually not allowed without ending the contract first.