Current Use Valuation Changes 2015
Owners who wish to withdraw land from the Current Use program will pay taxes for 2015 based on the value of their property, as demonstrated below, for the 2015 tax year. The new Current Use Legislation, while not meant to change the total value of the property, will however result in a reduced Current Use Allocation. This will require some changes to be made this year and as a result, the towns will need to send Change of Appraisal Notices on these properties for Current Use valuation and allow for the appeal process. The Current Use Allocation change will also result in the need for new tax bills for their property.
The Following hypothetical example will illustrate the implications of the changes in Current Use Legislation for the 2015 Grand List and beyond.
Sample Parcel Currently in Current use program:
- 102 acres – total land valued at – $240,000.00 – Comprised of:
- One 2 acre site excluded from CU – Valued at $40,000.00
- 100 acres enrolled in CU – Valued at $200,000.00
- Owner wishes to withdraw 10 acres from CU enrollment.
What happens under the new legislation?
- The total Fair Market Value of the 102 Acres cannot exceed the original $240,000 total land value.
The parcel owner wishes to withdraw 10 acres that are non-contiguous with previously excluded acreage, from the 100 acres enrolled in CU.
- The 2 acre exclude site value remains at $40,000.
- The 10 acres to be withdrawn has a value of $58,000 per the current land schedule as if it were a Stand-alone Parcel.
- Total value for the excluded 12 acres is now $98,000
- The 90 remaining enrolled acres valuation is adjusted to equal the remaining original value balance of $142,000.
The parcel owner wants to withdraw 10 acres that are contiguous with previously excluded acreage, from the 100 acres enrolled in CU.
- The 10 acres to be withdrawn is combined with the previously excluded 2 acre parcel to form a 12 acre excluded parcel which is valued per the current land schedule as if it were a Stand-alone Parcel.
- Total value for the excluded 12 acres is now $60,000.
- The 90 remaining enrolled acres valuation is adjusted to equal the remaining original value balance of $180,000.
Click on the following Link to view the entire document as well as the Current Use Calculation Sheet. Scan0079
Impact of new legislation on LUCT.
Between 7/1/15 and 10/1/15 there will be an “Easy Out” option which will waive the first $50,000.00 in Land Use Change Tax (LUCT) for landowners who withdraw any part of their undeveloped parcel.
The “Easy Out” LUCT calculations will be tracked and calculated by PVR as in previous years using the old proration method.
After 10/1/2015 the LUCT for the withdrawn parcel will be calculated based on the “New Real Value Calculation” process (outlined above) and then divided by the Common Level of Appraisal (CLA). You will need to notify Property Valuation and Review (PVR) of this new calculation. Normal valuation change process must also be followed with regards to the property owner. The municipality will be reimbursed 50% of the penalty up to $2,000.
Any Land withdrawn through the “Easy Out” option may not be re-enrolled for five years. Act 57, Sec 53.
There will be further discussion on this topic at the VALA annual meeting in September.