Present-Use Value Deferment

What is Present Use Value?

It is the value of the land in its current use as agricultural land, horticultural land, or forestland. The land meeting the eligibility requirements is taxed on the present-use value instead of market value of the land.

To be eligible for present-use values, a farm unit consisting of one or more tracts must meet the following requirements of North Carolina General Statute 105-277.

Approval into the Present-Use Value Program constitutes an implied contract whereby you agree to abide by all the requirements of the program in exchange for the preferential benefits afforded by the program and the County agrees to continue to provide these preferential benefits against all challenges as long as you abide by the requirements of the program.

It is the property owners responsibility to notify the County of all changes in and to the property. Failure to do so in a timely manner during the annual listing period shall result in penalties as set forth in N.C.G.S. 105.277.5. The County is required by law to review the property at least once every four years.

Application Requirements

Applications must be filed during the January listing period or within thirty (30) days of a change in assessed value of the land.

 

Ownership Requirements

The farm must be owner's primary place of residence, or must have been owned by the owner or a close relative for the four (4) years preceding January 1, or the owner had other land in the use value program and this is a tract which was acquired during the past year and the tract was in the use value program or was eligible to be in the use value program under the prior owner. The tract must have met the size, income, and other requirements under the prior owner.

 

Size Requirements

A farm unit of agricultural land must have at least one ten (10) acre tract actively engaged in the commercial production or growing of crops or animals under a sound management program, and for other tracts in the unit to be eligible, each tract must include agricultural land which is actively engaged in the commercial production under sound management. NOTE: Up to twenty (20) acres of woodland and wasteland that is part of a farm unit is automatically eligible if the agriculture land on that tract is eligible. Forest land with more than twenty (20) acres must meet the requirements for forest land. A farm unit of forest land must have at least one twenty (20) acre tract actively engaged in the commercial growing of trees under a sound management program, and for other tracts in the unit to be eligible, each tract must include forest land which is actively engaged in the commercial production under sound management. NOTE: Wasteland that is a part of a forest land tract is automatically eligible if the forest land on that tract is eligible. Agriculture and horticulture land must meet the requirements for each and ARE NOT "carried" by the woodland. A farm unit of horticultural land must have at least one five (5) acre tract actively engaged in the commercial production or growing of fruits, vegetables, nursery, or floral products under a sound management program, and for other tracts in the unit to be eligible, each tract must include horticultural land in actual production. Size requirements must take into consideration land in the present-use program located in other counties.

 

Income Requirements

Agricultrual land and horticultural land must have reproduced an average GROSS income for the past three years or $1,000 per year. Since the minimum acreage allowed is ten (10) acres, the implication is that the income produced should be at least $1,000 per ten (10) acres of open land (The North Carolina Tax Commission has ruled on appeals that the $1,000 minimum income does not apply for larger tracts.) Generally, income from products produced by the land is included, and service fees, rent, etc. are not. Forest land does not have income requirements. Crops used to produce income indirectly, such as hay for cow feed, corn for hog feed, should be included in the gross income based on what the crop would have brought at the market. (However, do not include both income on livestock sales and hay fed to that livestock, etc.)

 

Sound Management Requirements

Sound management means a program of production designed to obtain the greatest net return from the land consistent with its conservation and long-term improvements. Sound management is a requirement that is much more difficult to determine than the others. Generally, there must be a reasonable attempt to produce income or profit on the investment. Evidence must be given to indicate the use of acceptable management procedures which are practiced by commercial producers. Forest land application must include a plan of management proposed by a North Carolina State Forester or a Certified Forestry Consultant of your choice which must be followed.

Key elements in a written plan for a sound forestland management program included the following:

  • Management and Landowners Objectives Statement - Long range and short range objectives that outline how the owner wants to use property.
  • Location - Include a map that locates the property described and also delineates each stand referenced in the "Forest Stand(s) Description/Inventory and Stand Recommendations".
  • Forest Stand(s) Description/Inventory and Stand Management Recommendations - Include a detailed description of various stands within the forestry unit. Each stand description should detail the acreage, species, age size, (tree diameter, basal area, and height), condition (quality and vigor), topography, soils and site index or productivity information. Stand-specific forest management practices needed to sustain productivity, health, vigor must be included with a proposed timetable for implementation.
  • Regeneration - Harvest Methods and Dates - For each stand, establish a target timetable for harvest of crop trees, specifying the type of regeneration-harvest (clear-cut, seed tree, shelter wood, or selection regeneration systems as applicable).
  • Regeneration Technique - Should include a sound proposed regeneration plan for each stand when harvested of final crop trees is done. Specify intent to naturally regenerate or plant trees.

Forest management plans may be prepared by the property owner. However, if the property owner prepares the plan, the property owner must have the appropriate forestry management and analysis skill to properly prepare a plan comparable to a plan prepared by a qualified forester. All plans are held to the same standard and reviewed accordingly.

The property must be actively engaged in the commercial growing of trees under a sound management program as of January 1 of the year for which application is made.

It is the property owners responsibility to notify the Assessors Office of any and all change to the property once the property receives the benefit. Any property owner who fails to notify the Assessor shall be subject to a penalty of 10% of the total amount of the deferred taxes and interest thereon for each listing period for which they failed to give notice. NCGS 105-277.5.

 

Federal Conservation Reserve Program

Land in the present-use program which is then enrolled in the Federal Conservation Reserve Program (CRP) shall be listed as in actual production (105-277.3d) but must meet all other requirements. The income from CRP is counted towards income requirements.

 

Review of Eligibility

G.S. 105-296 (J) requires a review of each property every four years or every revaluation cycle to insure eligibility is maintained. A new application may need to be completed in the event of deed activity or acreage change.

 

Payment of Deferred Taxes

If at any time, a tract or part of a tract of land becomes ineligible for present use value assessment under the requirements of General Statutes 105-277, the deferred taxes including interest on that tract become due for the current year and the past three (3) years. When changes in eligibility are not reported by the owner, a ten percent (10%) penalty for each year the ineligibility is unreported is required by General Statutes 105-277.5.

 

Changes

Eligibility requirements are subject to change in accordance with North Carolina General Statutes.