APB agenda 051904 - Laserfiche WebLink

Browse Search

f. s. ATTACHMENT #4 Ag Use Valuation Assessment for Property Taxation Use value legislation in North Carolina allows owners of agricultural, horticultural and forest lands to have their property taxed at a value tied to current income it produces instead of its current assessed market value. The difference between use value and market value is usually quite large, resulting in a substantial reduction in property tax payments for producers of agricultural, horticultural or timber products. However, assignment of use value is not automatic; owners must apply, meet eligibility requirements and follow rules associated with the use value program. The following is a "short list" of important issues and concepts regarding ag use valuation in North Carolina. As such it is intended as general information to increase awareness of the program rather than a detailed account of the entire ag use program. 1. Landowners must file a timely and proper application with the assessor of the county in which the property is located. This must be filed during the regular listing period specified by the county, or within 30 days of notice of a change in valuation, or within 60 days of a change in ownership. 2. Minimum acreage requirements apply as follows: Agricultural land - -- -one tract of at least 10 acres. Horticultural land - -- -one tract of at least 5 acres. Forest land - -- -one tract of at least 20 acres. 3. Minimum income requirements apply as follows: For the three years preceding designation for use value, the acreage under ag/hort land must have produced an average gross income of at least pfvi�ils�-�r` 000 /year. There is no yearly gross income requirement for forestland, but the land must be in actual production under an active forest management plan. (There is an exception to the production or income "VVIt requirements for land under a qualified conservation easement eligible for the conservation tax credit.) 4. Sound management of the land is required. For ag and hort 'land, the owner must meet one of six factors which demonstrate the land is being operated under a sound management plan. For forestland the owner must submit and comply with a written forest management _ plan for producing and selling timber products. 5. Deferred taxes accrue. The difference between the tax due on a present use value basis and the tax that would have been payable without such designation becomes a deferred tax lien on the property for three years. This deferred tax is due and payable if and when the land fails to meet any condition or requirement for use value classification. 6. Several specific ownership requirements (and exceptions to them) exist that are too detailed to list here. Special attention should be paid to these requirements by new owners and land owned by a business entity (e.g., partnership, corporation, LLC, trust, etc.) 7.' Legislation authorizing and governing use valuation in NC underwent some important changes in 2002, with some clarifications and addendums since then. Some practices have changed from previous decades; they will become more evident and important in revaluation years. 8. Valuation ............. The authority to assess property and collect taxes resides in each individual county. Thus, the policies for applying ag use valuation may vary slightly from one county to another. Landowners and persons advising them regarding ag use valuation should direct their questions or comments first to the tax assessor of the county where the property is located. prepared by Dr. Arnold W. Oltmans, Associate Professor and Extension Specialist, Department of Ag and Resource Economics, North Carolina State University -- -May, 2004.