The Agricultural Exemption (Your Biggest Money-Saver)
Both Michigan and Indiana have agricultural exemptions that let farmers skip the entire permit process for legitimate farm buildings. This is huge - we're talking about saving $500-800 in fees PLUS 2-6 weeks of waiting around.
But here's the catch: The building must actually be for agriculture on an active farm. Not a token garden. Not "I'm planning to farm someday." Actual, current farming operations.
Michigan's Agricultural Exemption (MCL 125.1510(8))
📋 The Michigan Law
MCL 125.1510(8) says:
"A building permit is not required for a building incidental to the use for agricultural purposes of the land on which the building is located if the building is not used in the business of retail trade."
What "agricultural purposes" means in Michigan (MCL 125.1502):
- Cultivation/tillage of land and soil
- Production of crops for animals or humans
- Farming, dairying, pasturage
- Horticulture, floriculture, viticulture
- Animal and poultry husbandry
- Raising livestock including cattle, swine, and similar animals
What qualifies for Michigan exemption:
- ✅ Equipment storage on your farm
- ✅ Hay/grain storage for crops you produce
- ✅ Livestock shelters for animals you raise
- ✅ Farm workshops for repairing farm equipment
- ✅ Structures directly supporting your farming operation
What DOESN'T qualify:
- ❌ Living quarters (barndominiums)
- ❌ Retail operations (any type)
- ❌ Commercial businesses
- ❌ Personal RV/vehicle storage (not agricultural)
- ❌ Shops for non-farm businesses
- ❌ Recreational uses (basketball courts, man caves, etc.)
Indiana's Agricultural Exemption (IC 22-12-1-4(c))
Indiana is actually stricter than Michigan with a clear 4-step test. There's less gray area but also less room for error.
🌽 Indiana's 4-Step Test
Your building must pass ALL FOUR tests to qualify:
1. Is the structure used for agricultural purpose?
Cultivation of soil, production of crops, raising of livestock. Includes structures "integral to ag operation" like repair garages, storage sheds, grading buildings.
✅ If YES → Proceed to #2
❌ If NO → Exemption denied
2. Is it used for ANY other purpose?
This is the killer. Examples of "other purposes": restaurant, event center, living quarters, recreational use, commercial operations.
❌ If YES → Exemption denied (ZERO tolerance for dual use)
✅ If NO → Proceed to #3
3. Is it located ON the farm?
Must be on the land where crops are produced, livestock is raised, soil is cultivated. Can't be on separate parcel.
✅ If YES → Proceed to #4
❌ If NO → Exemption denied
4. Is it used for retail trade?
Exception: Farm produce stands operating ≤8 consecutive months per year are OK.
❌ If used for retail (except produce stand ≤8 months) → Exemption denied
✅ If NO retail trade → EXEMPTION APPROVED!
Result if you pass all 4 tests:
✅ NO building permit required
✅ NO design release required
✅ NO building code compliance required
✅ NO inspections required
Michigan vs Indiana: Key Differences
| Factor | Michigan | Indiana |
|---|---|---|
| Dual Use Tolerance | Vague "incidental to ag" language = some gray area exists | ZERO tolerance - "ANY other purpose" disqualifies immediately |
| Living Quarters | Should disqualify (law is vaguely worded) | Clearly disqualified under "other purpose" rule |
| Retail Trade | Any retail disqualifies (no exceptions) | Disqualifies EXCEPT produce stands ≤8 months |
| Law Clarity | Vague "incidental to ag" creates interpretation questions | Clear 4-step test with specific criteria |
| Enforcement | Very loose in rural areas, stricter in urban/suburban | More consistently applied with structured test |
| Basketball Court Example | Doesn't qualify (recreational, not agricultural) | Clearly disqualified (dual use = "other purpose") |
BONUS: Michigan's Agricultural Property Tax Exemption (Massive Long-Term Savings)
Here's something most builders won't tell you: If your agricultural building qualifies for Michigan's building permit exemption, it also likely qualifies for the property tax exemption under MCL 211.7ee. This is completely separate from permits and saves you serious money every single year.
💰 Michigan's Agricultural Building Property Tax Exemption
MCL 211.7ee exempts qualifying agricultural buildings from up to 18 mills of school operating taxes.
Real Savings Examples (2026):
40×60 Agricultural Building:
- Assessed value: ~$30,000-40,000
- 18 mills exemption: Saves ~$540-720 per year
- 20-year total: $10,800-14,400 saved
60×100 Agricultural Building:
- Assessed value: ~$60,000-80,000
- 18 mills exemption: Saves ~$1,080-1,440 per year
- 20-year total: $21,600-28,800 saved
This is IN ADDITION to the $500-800 you save skipping building permits!
How to Claim Michigan's Agricultural Property Tax Exemption
Step 1: File Form 2599 (Affidavit for Real and Personal Property of Agricultural Operations) with your township assessor by May 1st of the tax year.
Step 2: Document agricultural use:
- Property tax records showing agricultural classification
- Schedule F from federal tax return (farm income/expenses)
- Proof of crop production or livestock operations
- Photos showing farming activities
Step 3: Renew annually - You must verify agricultural use each year to maintain the exemption. Most townships send reminder notices.
What qualifies: Same requirements as the building permit exemption - building used for agricultural purposes on active farm property, not for retail trade or living quarters.
Does Indiana Have This Property Tax Exemption Too?
Short answer: No. Indiana does NOT have a building-specific property tax exemption like Michigan's MCL 211.7ee.
Indiana does have some general agricultural property benefits:
- 2% property tax cap: Agricultural properties capped at 2% of assessed value (vs 3% for commercial)
- Agricultural land assessment: Farmland assessed based on productivity value, not market value
- New deductions starting 2026: Non-homestead agricultural properties get new deductions - 6% of assessed value in 2026, increasing to 33.4% by 2031 (part of Senate Bill 1)
But these are general agricultural property benefits - not a specific "your pole barn saves you $1,000+ per year in taxes" exemption like Michigan has.
🎯 Michigan Agricultural Buildings: DOUBLE SAVINGS
When you build an agricultural pole barn in Michigan, you save twice:
Saving #1: Building Permits
- Save $300-800 upfront
- Save 2-4 weeks timeline
- Start building immediately
Saving #2: Property Taxes
- Save $500-1,500 EVERY YEAR
- Continues for life of building
- $10,000-30,000+ over 20 years
Total Value: $1,000 immediate + $10,000-30,000 long-term = $11,000-31,000+ benefit!
This is why documenting legitimate agricultural use properly is so valuable. The savings compound year after year. Most pole barn companies never mention this because they don't understand Michigan's agricultural laws.
Bottom line: Indiana's law is clearer and stricter with the 4-step test. Michigan's vague "incidental to agricultural use" language creates more gray areas that some people exploit. But Michigan farmers get WAY better financial benefits - both on permits and ongoing property taxes.
Bottom line: Indiana's law is clearer and stricter with the 4-step test. Michigan's vague "incidental to agricultural use" language creates more gray areas - but vague doesn't mean anything goes.
Building on an Active Farm?
We'll help you determine if your project qualifies for agricultural exemption and provide all documentation needed.
Real-World Examples: What Qualifies vs What Doesn't
✅ QUALIFIES: Equipment Storage
- You farm 40 acres of corn/soybeans
- Building stores tractors, combines, farm equipment
- Located on your farm property
- No other use
Michigan: EXEMPT
Indiana: EXEMPT
Saves $500-800 + 2-4 weeks
✅ QUALIFIES: Hay Storage
- You produce hay on your property
- Building stores the hay you grow
- No retail sales from building
- 100% agricultural use
Michigan: EXEMPT
Indiana: EXEMPT
No permits needed
❌ DOESN'T QUALIFY: Barndominium
- Living quarters with kitchen/bathroom
- Even if 90% is shop/ag space
- Residential use = not agricultural
- Requires residential permits
Michigan: PERMITS REQUIRED
Indiana: PERMITS REQUIRED
Cost: $500-1,200 for permits
❌ DOESN'T QUALIFY: Dual Use
- 50% farm equipment storage
- 50% basketball court for kids
- Recreational use = not agricultural
- Mixed use building
Michigan: PERMITS REQUIRED
Indiana: DENIED ("other purpose")
Indiana especially strict on dual use
❌ DOESN'T QUALIFY: RV Storage
- Personal vehicle/RV storage
- Not supporting farming operation
- Not agricultural use
- Even if on farm property
Michigan: PERMITS REQUIRED
Indiana: PERMITS REQUIRED
Cost: $300-600 for permits
⚠️ GRAY AREA: Horse Boarding
- Commercial horse boarding business
- Some argue: "animal husbandry" = agricultural
- Others argue: Commercial = retail trade
- Interpretation varies by township
RECOMMENDATION: Get Permit
Don't risk it - check with local officials
What Permits Actually Cost in 2026 (Real Numbers)
When you DO need permits (anything non-agricultural), here's what to expect based on current 2026 data:
Michigan Permit Costs
Small Projects
$200 - $400
Under 1,000 square feet. Small garages, shops, storage buildings.
Example: 24×32 garage in rural township: $285
Standard Projects
$300 - $600
1,200-3,000 square feet. Most common pole barn sizes.
Example: 40×60 shop: $540
Large Structures
$600 - $1,200
3,000+ square feet. Large agricultural, commercial projects.
Example: 60×100 commercial: $950-1,450
What affects Michigan permit costs:
- Building size (square footage)
- Intended use (residential vs commercial)
- Your township (rural typically cheaper than urban)
- Construction value
- Complexity of project
Indiana Permit Costs
Similar range to Michigan for most projects:
- Basic structures: $300-600
- Standard projects: $500-800
- Large/complex: $800-1,500
- Commercial applications: $1,000-2,500
💰 Additional Costs to Budget:
- Engineering stamp (if required by township): $500-1,500 extra
- Electrical permit: $75-200 (separate)
- Plumbing permit: $75-200 (separate)
- Mechanical/HVAC permit: $75-150 (separate)
Note: Building permit covers structure only. Trade permits are additional and pulled by your electrician, plumber, or HVAC contractor.
Permit Timeline: How Long It Actually Takes
⚡ Fast Track: 3-5 Business Days
When this happens:
- Simple residential projects
- Small rural townships
- Complete application with Ramco engineered plans
- Off-season (November-March)
Some Michigan townships like Midland advertise 3-day turnaround for complete residential permit applications.
📅 Standard: 1-3 Weeks
Most common timeline:
- Week 1: Submit complete application
- Week 2: Plan review by building department
- Week 3: Approval and permit issued
This is what to expect for most 30×40 to 60×100 pole barns in Michigan and Indiana.
⏰ Longer: 4-6 Weeks (Or More)
When delays happen:
- Spring/summer busy season (May-July)
- Complex or very large structures
- Township requires engineer stamp
- Incomplete application
- Flood zone reviews needed
Real feedback: During peak season 2025, some Michigan townships had 6-10 week backlogs for permit approvals.
How to Speed Up the Permit Process
- Submit complete applications - missing info causes delays and rejection
- Use Ramco engineered plans - building departments love complete engineered drawings that show everything
- Apply in off-season - November-March typically has faster turnaround
- Call ahead - ask building department what they need before submitting
- Work with experienced builders - contractors familiar with local requirements get faster approvals
💡 Our 2-Day Delivery Advantage:
While competitors wait 2-4 weeks for materials to arrive, our Ramco supply ships in just 2 business days. This means:
- We time materials order strategically around permit approval
- Materials arrive fresh right when builder is ready
- No materials sitting in weather for weeks
- Faster total project timeline
With agricultural exemption: Materials in 2 days, start building immediately = project done in 3-4 weeks total.
Ready to Build the Right Way?
We provide complete engineered documentation whether you need permits or qualify for exemptions.
We respond within 1 hour, 7 days a week
The Reality: Some People Exploit the Gray Areas
Let's be real. Michigan's vague "incidental to agricultural use" language creates gray areas. And yes, some people exploit them - especially in rural areas where building officials don't scrutinize closely.
You'll hear stories about:
- People planting token crops to claim agricultural exemption for barndominiums
- Buildings with minimal agricultural use getting away with no permits
- Rural townships not enforcing strictly
Does it happen? Yes. Loose enforcement in rural areas means some people get away with pushing the boundaries.
Should you try it? Absolutely not. Here's why:
⚠️ Why "Getting Away With It" Isn't Worth The Risk
- Insurance won't cover you: Homeowner's insurance for unpermitted living space? When fire/damage happens and they investigate, claim gets denied. You're out $50K-100K+ with no recourse.
- Resale nightmare: Must disclose unpermitted structures. Buyer's mortgage company won't finance unpermitted buildings. Either fix it (expensive) or sell at huge discount. Lost $20K-40K in property value.
- Code enforcement crackdown: New building official gets hired, decides to enforce strictly, issues violations on existing "agricultural" buildings that are clearly residential. You face fines or forced removal.
- Criminal liability: Someone gets hurt in unpermitted living quarters (fire, structural issue, no code-compliant egress). Prosecutors investigate. Could face criminal charges for building unpermitted residential.
- Stop work orders and fines: Township discovers construction without permits. Immediate stop work order. Fines of $500-2,500+ for first violation, plus daily fines if you don't comply. Could be ordered to tear down unpermitted work.
Our position is clear: We help legitimate farmers use legitimate exemptions. We don't coach people to plant token crops to skip permits on barndominiums. The $600 permit is cheap insurance compared to the risks.
What Happens If You Skip Permits (And Get Caught)
How You Get Caught:
- Nosy neighbors report to township building department
- Building official drives by sees new construction
- Utility connections electric/water companies report new service
- Satellite imagery some townships monitor for new structures
- Insurance claims investigator notices unpermitted structure
- Property sale buyer's inspection reveals unpermitted building
The Consequences:
Stop Work Order
Building department posts official notice. All construction must cease immediately. Can't proceed until permit obtained and fees paid (often doubled as penalty).
Fines
Typical: $500-2,500 first violation
Daily fines possible if you ignore stop work order: $100-500 per day until you comply.
Forced Removal
Extreme cases: Township orders you to tear down unpermitted structure. You eat the entire cost. Happens with living quarters claiming ag exemption.
Additional problems:
- Insurance may not cover unpermitted structures (claims denied)
- Property sale issues (must disclose, buyers walk away)
- Lost property value ($20K-40K+ common)
- Must expose covered work for inspections (additional cost)
- Civil citations, potential criminal charges
Getting right with the township: Stop work, submit permit application, pay doubled fees, pay fines, allow inspections, may need to tear open walls to inspect covered work. Final cost often 2-3x what permit would have cost originally.
Special Cases & Gray Areas
Barndominiums (Shop + Living Quarters)
The reality: Living quarters = residential permits required in both states. Period.
Doesn't matter if 90% is shop and 10% is apartment. Doesn't matter if you're on a farm. Living quarters always require residential permits and inspections for safety (egress windows, smoke detectors, proper electrical, etc.).
Our approach: "You'll need residential permits for the living quarters. We can build the shop portion under agricultural exemption if you're actively farming, but the living space goes through normal residential permitting. It's cleaner and protects your investment."
Horse Facilities
Breeding/raising horses for sale: Production of animals = agricultural use. Likely qualifies if it's a legitimate operation, not hobby.
Commercial horse boarding: Gray area. Some argue it's "animal husbandry" (agricultural). Others argue it's commercial business operation (retail trade). Recommendation: Check with your township before assuming exemption.
Personal horses (hobby): 2-3 horses on 5 acres for personal riding = hobby, not commercial agriculture. Doesn't qualify for exemption.
Part-Time Farmers
You don't have to be a full-time farmer to qualify. Guy with full-time job who farms 20 acres on weekends? If he's actively producing crops or raising livestock for sale, that's legitimate agriculture.
The key is active, current farming - not "I'm planning to farm" or token gardens.
Produce Stands & Retail
Michigan: Any retail trade disqualifies. Even seasonal farm markets. If you're selling directly to customers from the building, you need permits.
Indiana: Exception for farm produce stands operating ≤8 consecutive months per year. More than 8 months or year-round = need permits.
Storage of produce you sell elsewhere: That's not retail trade. Building stores produce you take to farmers markets = still qualifies as agricultural storage.
How We Handle Permits for Our Customers
Step 1: We Determine Eligibility
Questions we ask every customer:
- "What will you use this building for?"
- "Do you currently farm this property?"
- "How many acres do you actively farm?"
- "Any plans for living quarters?"
- "Will you run any business operations from it?"
- "Any recreational uses planned?"
Based on your answers:
- ✅ Legitimate ag building: "Great news, you likely qualify for agricultural exemption. That saves $500-800 and 2-4 weeks. We'll provide all documentation if your township questions it."
- ❌ Non-ag use: "This will need standard building permits since it's not agricultural use. Typical cost is $300-600, timeline 1-3 weeks. We provide complete engineered plans for smooth approval."
- ❓ Gray area: "This might qualify, but let's verify with your township building department first. Better to know upfront than get surprised later."
Step 2: Complete Documentation (Every Customer)
Whether you need permits or qualify for exemption, you get:
- Complete Ramco engineered drawings (30+ pages)
- 3D renderings showing your finished building
- Structural calculations for Michigan/Indiana snow/wind loads
- Complete material specifications
- Foundation details and requirements
- Everything needed for permit submission OR to defend agricultural exemption
Why building departments love Ramco plans:
Most pole barn companies send townships a basic sketch. We send complete engineered systems with structural calculations, cross-sections, material lists, foundation specs - everything. Building officials approve these quickly because all their questions are answered upfront.
Step 3: Permit Submission (If Needed)
Two options:
Option A: Your builder handles it (most common)
Experienced builders know local requirements and have relationships with building departments. They submit applications, coordinate inspections, get certificate of occupancy. This is typically included in their service.
Option B: You submit it yourself
Michigan and Indiana allow homeowners to act as their own general contractor. We provide all documentation needed. You submit application to your township, pay fees, coordinate with building department.
Step 4: Strategic Timing
Agricultural Exemption: Materials ship immediately (2-day Ramco delivery), builder starts right away. Total timeline: 3-4 weeks from quote to completed building.
With Permits: We time your materials order strategically. Either when permit is approved OR when builder is scheduled (whichever makes sense). Materials arrive in 2 days when builder is ready to start - not sitting in weather for weeks like competitors' 2-4 week lead times.
Frequently Asked Questions
Do I need a permit for a pole barn in Michigan?
Depends on use. True agricultural buildings on active farms supporting farming operations are often exempt under MCL 125.1510(8). Everything else (barndominiums, workshops, garages, commercial) needs permits. Cost: $300-800 typical, timeline 1-3 weeks.
Do I need a permit for a pole barn in Indiana?
Same principle - agricultural buildings on active farms may be exempt under IC 22-12-1-4(c) if they pass the 4-step test. Non-agricultural buildings need permits. Indiana is stricter about dual-use (ANY other purpose disqualifies).
Can I build a barndominium without permits?
No. Living quarters require residential permits in both states regardless of agricultural exemption. This is for safety - proper egress, electrical, plumbing, etc. Anyone telling you different is setting you up for insurance and legal problems.
What if I plant crops just to qualify for the exemption?
The exemption is for buildings supporting actual farming operations - not token crops planted to skip permits. You're risking insurance denial, resale problems, and code enforcement if you're not legitimately farming. The $600 permit is cheap insurance vs those risks.
How long are permits valid?
Typically 1-2 years in most Michigan and Indiana townships. Must start construction within that timeframe or permit expires and you need to reapply.
Can I pull my own permit as homeowner?
Yes, both states allow homeowners to act as their own general contractor. However, most people have their builder pull permits - they know local requirements and have relationships with building departments.
Do I need separate permits for electrical/plumbing?
Yes, those are separate trade permits costing $75-200 each. Building permit covers structure only. Your electrician and plumber pull their own permits.
What if my township doesn't require permits?
Some small rural townships don't enforce building codes. You still want engineered plans for safety, insurance purposes, and resale value. We provide complete Ramco engineered documentation regardless.
What documentation proves agricultural exemption?
We provide complete Ramco engineered plans showing the building meets structural requirements. If township questions agricultural use, you can provide: property tax records showing agricultural classification, proof of crop/livestock production, photos of farming operations, etc.
Our Recommendation: When to Use Exemptions
Use Agricultural Exemption Aggressively For:
- ✅ Equipment storage - you farm, building stores tractors/combines/farm equipment
- ✅ Hay/grain storage - you produce it, building stores it
- ✅ Livestock facilities - housing for animals in active farming operation
- ✅ Farm workshops - repairing farm equipment as part of farming operation
These are legitimate, defensible, and save you real money ($500-800 + 2-4 weeks). Use the exemptions - they exist for farmers.
Get Permits For:
- ❌ Barndominiums - living quarters always need residential permits
- ❌ Workshops for non-farm businesses - not agricultural use
- ❌ Personal vehicle/RV storage - not agricultural, even if on farm
- ❌ Dual-use buildings (farm equipment + basketball court, etc.)
- ❌ Commercial operations - retail, offices, businesses
- ❌ Recreational buildings - man caves, hobby shops, etc.
$600 permit is cheap insurance vs $50K+ in problems later. Insurance coverage, resale value, legal protection - all worth way more than permit cost.
Gray Areas - Verify First:
- ❓ Commercial horse boarding - check with township
- ❓ Part-time farming operations - verify legitimacy
- ❓ Farm workshops with some non-farm use - get clarification
When in doubt, ask. Better to know upfront than discover problems after building.
Build Right. Build Smart. Build With Confidence.
We help you determine if your project qualifies for agricultural exemption OR walk you through the permit process. Either way, you get complete Ramco engineered documentation, 2-day materials delivery, and expert guidance.
Serving Michigan & Indiana - We know both states' requirements inside and out