Michael Jackson’s 2,700-acre Neverland Ranch received nearly $70,000-a-year tax benefit meant for farmland. Then officials found an amusement park, a zoo and more

Michael Jackson’s Neverland Ranch was famous for its amusement-park rides, zoo, movie theater and fantastical attractions. But there was another, much less glamorous side to the sprawling California estate: cattle ranching.

That agricultural activity became important for an unexpected reason. It helped parts of Neverland Ranch qualify for California’s Williamson Act, a state program designed to encourage landowners to preserve agricultural land by offering them reduced property-tax assessments.

The arrangement was perfectly legal in principle and was not a special tax deal created for Jackson. The Williamson Act had been introduced in 1965 to discourage agricultural land from being converted to more intensive development. Landowners who agreed to keep qualifying property in agricultural or compatible open-space use could receive a lower assessment than they might otherwise face based on the land’s development potential.


For a property like Neverland, however, the arrangement became complicated.

Jackson purchased the roughly 2,700-acre property in the 1980s and transformed it into one of the world's most recognizable private estates. It included his home, an amusement park, a zoo and other recreational facilities.

At the same time, much of the property remained associated with agriculture. Jackson legitimately leased most of the ranch to a cattle-ranching operation.

That meant Neverland was not simply a private amusement park sitting on thousands of acres. It also had a genuine agricultural use—one that could qualify eligible portions of the property for preferential tax treatment.

But by the early 2000s, Santa Barbara County officials were taking a closer look at how the ranch was being developed.

In 2003, county officials said they had discovered that Jackson had failed to obtain required building permits or comply with zoning requirements for a number of developments constructed over roughly a decade.

Some of the structures were relatively ordinary. Others were anything but.

Officials said permits should have been obtained for a gatehouse, a three-car garage, a primate center, a go-kart track, seven amusement-park rides and a giant outdoor movie screen.

The issue was not simply whether individual structures had the proper permits. County officials also had to consider whether the extensive recreational development was compatible with the agricultural-preservation restrictions covering portions of the property.

Neverland presented an unusual combination: a working cattle ranch and a private entertainment complex occupying the same enormous estate.

In September 2003, the Santa Barbara County Board of Supervisors voted 4-0 to accept Jackson’s proposal to remove his house, amusement park, zoo and several other buildings from the agricultural-preserve program.

About 70 acres were involved.

Importantly, that did not mean all of Neverland suddenly stopped having an agricultural connection. The affected developed portions were removed from the program, while qualifying agricultural land could continue under the arrangement.

The decision also had a financial consequence.

County officials estimated that Jackson had been saving roughly $70,000 a year in property taxes through the agricultural-preservation arrangement.

For the 2002-03 tax year, the county assessor's office placed Neverland's assessed value at about $12.3 million, with property taxes estimated at approximately $130,000. Without the agricultural tax benefit, officials said the property's assessed value could increase by around $6 million, potentially pushing annual property taxes toward $200,000.

Those were contemporary county estimates rather than a definitive calculation of Jackson's eventual long-term tax bill.

And the increase was not necessarily immediate.

Under the Williamson Act system, land leaving an agricultural-preserve contract could enter a nine-year non-renewal period, allowing its assessment to gradually move toward the level that would apply without the restrictions.

The Neverland controversy therefore involved two separate questions that became intertwined: whether certain developed portions of the estate remained eligible for agricultural tax treatment, and whether Jackson had followed county permitting and zoning rules.

The controversy came as Jackson's finances were becoming increasingly difficult. Several years later, in 2008, Neverland became subject to foreclosure proceedings after a loan connected to the property went into default. An investment company associated with Colony Capital acquired the loan, and the property was subsequently placed into a joint venture.

Jackson died in 2009.

The estate was later renamed Sycamore Valley Ranch, and in 2020 billionaire Ron Burkle purchased the property for a reported $22 million.