6/13/11 – YOUR LAND INVESTMENT TAXES

Buy Land – Save up to 95% on Property Taxes

When you buy land in the NC mountains, more specifically 20 acres or more, you can benefit from your land investment in short order.  There exists a special land value program, offered by the local property tax authorities which can  turn your acreage into cheap land.

Called the “Present Use Value” program, specifics can be obtained from the North Carolina Department of Revenue.  Once in the program your land investment will be taxed at a much lower assessed value, than most other land. In general, when you buy land, the property has been assessed at some value deemed close to fair market value.  Just as an example, say you buy 100 acres in Wilkes County.  The current tax value may be assessed at about $4,500 per acre.  The tax rate in Wilkes this year is $0.63 cents per hundred dollars of valuation. Thus, the property taxes on your land investment would be about $2,835 for the year.

How do you save tax dollars on your land investment?

In 2010, all land in this unique program was assessed at only $248 per acre.  In other words your 100-acre land investment would have an assessed value of $24,800, and the taxes would be only about $156.24 for the year.  That’s a whopping 94.5% saving of $2,678!.  So, what’s the catch?

Years ago, the furniture industry found that the finest hardwoods in the country grow right here in the NC mountains.  Red Oak, Maple, and White Oak flourish in the North Carolina mountains, while tulip poplar, a softer hardwood used in furniture frames also grows straight and tall.  To encourage forestry management, the Present Use Value program was created.  Here’s how it works.

When you buy 20 acres or more of forested land, you can apply immediately to be included in the program.  You simply apply by filling out a cost-free application at the county tax assessors office.  You then ask the N.C. Foresat Service to provide a forestry management plan - a short report – on the timber currently growing on your property.  This may take several months.  Once you have the report, you take a copy to the tax office.

Once you’ve owned the property for four years, in addition to the current assessed tax value on your property, the county will assign its current “present use value” also (last year it was $248 per acre in Wilkes County).  From that point on you will pay property taxes based on the present use value of your land investment.

You are not required to let the public onto your land, nor are you giving up any of your property rights.  The county merely expects you to practice good timber management on the portion of your land that is wooded.  In the event that you sell your land – say 30 year later – you will be required to pay three years of taxes preceding the sale (plus the current year) at the regular assessed value.  If you’ve owned the land for 30 years, you would have paid the regular taxes for the first 4 and last 4 years, and enjoyed the much lower property taxes for the middle 24 years.

When you buy land, especially as a land investment, call for details on this valuable statewide program. The North Carolina mountains offer the best invesatment land, plus very attractive present use value taxation.