By Jess Barron, Lindsey’s Inc. Realtors
Certain properties, including agricultural lands, forestlands, and environmentally sensitive areas, may be eligible for reduced property tax rates through conservation use valuation assessment (CUVA). The properties are assessed according to a combination of soil type, productivity and a reduced fair market value factor.
This typically results in a significant reduction of property taxes. Landowners receive a reduced ad valorem tax rate for their property (epd.georgia.gov). Yes, this will save you money! The term of a conservation use is 10 years. The owners must promise to maintain their lands in designated use (agricultural, forestry or environmentally sensitive) for 10 years. Landowners can re-enroll after 10 years if they wish to remain in CUVA.
The CUVA program is administered by each county’s tax assessor’s office. Requirements per county may be different, but typically a minimum of 10 acres is required. Some counties have recently increased this to 25 acres. No more than 2,000 acres may be enrolled in CUVA by one non-industrial, private landowner. Foreign citizens and foreign corporations are not eligible to enroll. The land must be kept in its qualifying use and cannot be used for any non-agricultural commercial business (epd.georgia.gov).
Following up on last issue’s article regarding land sales, conservation uses are something else you need to consider when purchasing acreage or a home on acreage. There are significant penalties for landowners who break the conservation use before the end of the 10-year period. Owners who break the conservation use covenant must pay back to the taxing authorities TWICE the savings they received over the life of the covenant to the point it was breached, plus any applicable interest.
If the property is sold during the covenant period, the new landowner must agree to continue the covenant or be responsible for penalties and taxes due if the covenant is breached under their ownership (epd.georgia.gov). If you are buying land, a farm, or a home on acreage, one of the first things you should check is if the property is a conservation use.
Your Realtor can place language in your purchase and sale contract that will protect you in the event there is a conservation use. CUVA is a great way to save money on taxes. Acknowledgement and agreement of CUVA, in writing, by the buyer and seller, is very important in a real estate transaction. You do not want to be stuck paying the penalty on breaching the conservation use.
Jess Barron is an Associate Broker with Lindseys, Inc. Realtors and President-Elect of the Newnan-Coweta Board of Realtors.