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27 <br /> The sale of a landowner's development rights would be viewed as a normal capital gains <br /> transaction. However, arrangements could be made to spread the payments over time, thus reducing the <br /> impact of the capital gains tax. Because of its ability to accept gifts, grants, and bequests, the Board of <br /> Commissioners could also provide the opportunity for a landowner to tailor the sale to his/her specific tax <br /> situation, including inheritance taxes. <br /> 18. If a landowner sold the development rights,could the land still be taken by eminent <br /> domain (condemnation)for something like a reservoir or landfill site? <br /> Yes. As part of its agricultural preservation efforts, Orange County has adopted a Voluntary <br /> Farmland Preservation Ordinance under the provisions of G.S. 106-740. If the farm has been designated <br /> as a voluntary agricultural district by the Board of Commissioners, the Ordinance provides for a public <br /> hearing on the proposed condemnation and the opportunity to submit written findings and <br /> recommendations to the decision-making body. <br /> 20. If development rights were sold, could the property still be annexed? <br /> Yes. The sale of development rights would not affect whether or not the property were annexed. <br /> However,if a number of adjoining farmland owners all joined the program,annexation would become less <br /> likely, since the statutory requirements in the annexation law would become difficult to meet. <br /> 21. If a landowner is buying his/her property on contract or has a mortgage,could he/she <br /> still enter the program? <br /> Yes. However, the type of contract or mortgage that the landowner holds would determine the <br /> terms of his/her transaction with the County. In any event, a subordination agreement or waiver would <br /> have to be secured from the mortgage or lien holder prior to closing on the property. <br /> 22. What has been the experience of farmers who try to obtain a loan once the <br /> development rights have been sold? <br /> In other locations with PDR programs,this has not been a problem.Whether or not a bank makes <br /> a loan is based on the ability of the farm to pay off the loan and that, in turn, is based on the farm's <br /> income. If the value is there, the bank will make the loan. In many cases, the money acquired from the <br /> sale of development rights is used to improve the farming operation. This enhances the farm's value and <br /> thus the ability to obtain more loans. <br />