Tax Relief for Landowners

— Written By Susan Condlin and last updated by Kay Morton

With the ever-increasing urbanization and industrial development of our county, the market value of agricultural land may be many times its production value. This causes a heavy tax burden for our farmers and could force them out of farming the land. In 1973 the North Carolina Legislature recognized this problem and passed the North Carolina Use-Value Taxation Law. This law is designed to give tax relief to owners of agricultural, horticultural and forest lands. Under North Carolina’s present use value taxation program, qualifying land used in agriculture, forestry, and horticulture is taxed on its use-value rather than its fair market value.

To ensure that only bona fide agricultural producers qualify for this deferred program, landowners must complete an application for Present Use-Value Assessment under one of three categories: agriculture, forestry or horticulture. Once the tax office receives the application they will visit the property and either approve or deny the application.

Agricultural land must be actively engaged in the commercial production or growing of crops, plants, or animals under a sound management program. At least 10 acres must be in production and must have produced an average gross income of at least one thousand dollars for the previous three years.

Forestland must be actively engaged in the commercial growing of trees under a sound management program. At least 20 acres are in actual production and a forest management plan must be submitted with the application. The forest management plan can be developed by the landowner, a private forestry consultant, or by the North Carolina Forest Service located on Firetower Road. There are no income requirements for forestland.

Horticultural land must be actively engaged in the commercial production or growing of fruits or vegetables, or nursery or floral products under a sound management program. At least five acres must be in actual production and must have produced an average gross income of at least one thousand dollars for the previous three years.

The “present use-value” tax program is designed to assist those who want to continue to farm as land values escalate in price. This program is a deferred program, meaning once you come out of the program or the land no longer qualifies for the program you are subject to back taxes. Present Use Value Assessment information and the application needed to apply for the deferred tax is located on the Lee County Tax Appraisal website at

http://www.leecountync.gov/Departments/TaxAdministration/TaxAppraisals.aspx

For answers to specific, detailed questions, or for help in completing the Present Use Value Assessment application contact the Lee County Tax Office, 3rd floor of the Government Center, 106 Hillcrest Drive or call them at (919) 718-4660. You will find the staff very helpful. The form may look a bit complicated and Cooperative Extension can also assist you with the application, but we always defer to the tax office in finalizing the application process. Deadline to apply, which is once a year, will beJanuary 30, 2015

Susan C. Condlin is County Extension Director for North Carolina Cooperative Extension in Lee County.