How To Start Homesteading (Legally)

August 3, 2021

Hi, I'm Paige, half of the duo behind Fairway Stables™

This website is the one I've been searching for, for years; a compilation of knowledge on all things horsemanship, including practical advice on how to start an equestrian business.

No matter your experience level with horses or homesteading, I hope this is a place you can get lost in, and learn something along the way - we welcome everyone from vets, to lifelong ranchers, trainer, to nonprofits contributing.


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Everything you need to know (legally) for your homestead!

Maybe you have some land, some farm animals, or both. No matter what, it’s important to know what you need to do to keep your homesteading legal before you start adding to it.

In this post, we cover:

This is a common misconception. Even if you have no desire to sell the crops or animals on your property, there are a few necessary steps to keep your homestead legal:

What tax exemptions or permits do you need when homesteading?

First and foremost, after purchasing your homestead property, check to see if you qualify for a farm exemption permit. Just google “what permit do I need for my homestead in [your state]?” In Oklahoma, this permit offers the benefit of not having to pay sales tax on your farm supplies. These benefits can also extend to farm equipment and even fuel purchased for use on the farm. A link to the exact form to fill out can be found here

Are there “setback laws” or zoning laws around your homesteading property? 

If you want to have fencing or animals on your property, what setback laws do you need to know about? Once again, Google will be your best friend. Google “setback laws in your city” to find a clear answer. But remember: it is possible for cities to have regulations that can restrict property owners from building fences, structures, or having animals within a certain distance of another structure. Ideally, research this question before you purchase your property.

If you have animals on your property, here’s how to avoid liability:

If you invite people onto your property for business reasons, you will have more guidelines to follow. (Read this post for more in-depth information.) However, do you have large animals like cows or horses on your homestead? You have a legal duty to make sure that they are secured within their fencing, for two mains reasons:

  • Reason #1: Under American law, there is something called an “attractive nuisance”. In layman’s terms, this means that someone could expect a child who sees a pretty horse to want to pet the pretty horse. So, you, as the horse owner have to do whatever you can to keep your animals away from children and keep children away from harm. Put simply, make sure you have a fence that can be locked, so you can secure your animals.
  • Reason #2: If your animals get loose and escape from your property, you could have a legal problem on your hands. While, of course, you never want that to happen, this is just a reminder that you can’t get lazy about how you take care of your animals. There have been terrible cases where horses escape from their paddocks, run onto the road, and are involved with car accidents. In those cases, when there’s proof that the horse owner did not properly secure their fence, the horse owner can end up in serious legal trouble. 

Make sure you have the proper insurance for your animals: You can find more information in this post, but if you own horses especially, it’s wise to have insurance for them. Not only will this help you pay for any unexpected, expensive vet bills that could occur (such as colic), but this will be a “security blanket” to protect you in case you do run into unexpected legal trouble with your animals.  

Find out everything you need to know about equine law HERE

Want to transition to a homesteading business? Start by asking yourself these questions:

First and foremost, just because you have land, animals, a garden, or all of the above,  you don’t have to make a business out of it. There’s so much joy to be found just from cultivating and running your homestead. Owning land doesn’t necessarily mean you need to start a business.

If you are just beginning, ask yourself, why do you want to start a homestead? Would you like to start selling some of your eggs at a farmer’s market? Do you have specialized plants like dahlias or lavender that you know you could sell to local florists? Or, do you have animals you would like to start selling? The critical first step of starting any business is doing your market research and honing in on your niche. 

Get experience homesteading

The best starting place by far for anyone looking to make money from their homestead is to gain experience. This can be tricky, but reaching out to other local farmers or homesteaders and forming mentor-type relationships is priceless. Make connections with those who have come before you. Try to soak up every ounce of knowledge they share with you. 

Of course, there will always be a “learn as you go” aspect. When it comes to “relying on the land”, mother nature is always ready to throw some curveballs. Plus, animals teach you something new every day. Having a mentor you can call when the unexpected happens will be invaluable to the success of your homestead. 

From a legal standpoint, there’s another reason why having a network of other homesteaders is important. When it comes to the legalities of owning a homestead, “you don’t know what you don’t know.” Others who have gone before you may be able to point you in the right direction. 

If you have some land and something you’re thinking about selling, you may be thinking, “what next?”

Do you have a hobby farm or a business? 

One of the joys of having a homestead is that you can do so much with so little. 

In many cases, it only takes a few acres to have a full-fledged flower farm on your hands! 

Let’s use a common example. You have a few acres of land, maybe some chickens, a small garden, and some honeybees. Friends and family begin asking if they can buy some honey from you. Then, maybe some eggs, or even some flowers and veggies from your garden. As your operation grows, others start reaching out to see if they can buy those items from you, too. At this point, do you have a hobby farm, or a business? 

Here’s what you need to know:

You can monetize your hobby and keep it as a hobby, without turning it into a full-fledged business. But, you need to know two things in order to keep your hobby farm legal:

  1. Are you making any profit from what you’re selling? If you’re accepting any form of compensation from your hobby farm (including simple trades), you’re what’s called a “sole proprietor” in the eyes of the law. We’ll go into more detail on what exactly this means below. 
  2. You need to consider your tax and insurance requirements. A sole proprietorship provides no liability protection. So, you need to make sure that whatever you are selling falls under your general liability homeowner’s policy. If the insurance company considers your homestead a “commercial enterprise”, it may not cover any liability that could pop up from selling any of your products.
  3. If you’re selling anything from your homestead or hobby farm, you need to get an EIN number.
    1. What’s an EIN number? This is essentially a social security number for whatever is bringing in money. This is a legal requirement that becomes very important at tax time! 
    2. How do you get an EIN number? Luckily, it’s easy, and even free! Go to irs.gov, fill out the form for applying for an EIN number, and you’ll get one immediately.

Now you know the few requirements you need to follow if you want to make a profit from your hobby farm or homestead.

But, what if you want to turn it into a business?

We cover exactly how to turn a hobby farm or homestead into a business, and why would you choose to do so here.

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