Current Agricultural Use Valuation (CAUV)
Transcription
Current Agricultural Use Valuation (CAUV)
Current Agricultural Use Valuation (CAUV) Larry Gearhardt Ohio Farm Bureau [email protected] General Reappraisal For Real Property General Reappraisal For Real Property General Reappraisal For Real Property General Reappraisal For Real Property We’re Talking about the value of land--Not your final tax bill land Factors that effect real estate taxes: • Increase in property values • The level of assessment • Millage or tax rate • Tax adjustment factor • Special factors: • 10% rollback • 2 1/2 % Rollback on Homestead • Homestead Exemption Requirement for Qualification Ohio Revised Code Section 5713.31 • Land totaling more than 10 acres • Three preceding calendar years • Devoted exclusively to commercial agricultural use OR • government program Requirement for Qualification Ohio Revised Code Section 5713.31 • Land totaling less than 10 acres • Three preceding calendar years • Devoted exclusively to commercial agricultural use • Average yearly gross income of $2500 – Anticipated yearly gross income of $2500 OR – government program Requirement for Qualification Ohio Revised Code Section 5713.31 • After three years, can allow land to lie fallow – No acts inconsistent with return of land to agriculture • Less than 25% of tract devoted to conservation practices – grass waterways, terraces, diversions, filter strips,field borders, windbreaks, riparian buffers, wetlands,ponds, – cover crops for these purposes What is Agricultural use ? Ohio Revised Code Section 5713.30 Commercial animal or poultry husbandry aquaculture apiculture commercial timber timber contiguous to other qualifying land field crops tobacco fruits vegetables nursery stock ornamental trees sod flowers Special Issues Concerning Timber • At the beginning of CAUV, timber was considered wasteland • Certain events – court cases, low tax revenue • have increased attention to timber Special Issues Concerning Timber • How do you determine if timber is commercial ? • Even though not required by law, many Auditors are requiring forest management plans – One problem - length of time to complete plan • Opinion - may be able to prove “commercial” timber without a forest management plan • Future of CAUV and timber ? Explanation of the calculation of Values for various soil mapping units for Tax Year 1993 The annual current agricultural use values of land are calculated by the capitalization of typical net income from agricultural products assuming typical management, cropping and land use patterns, and yields for given types of soils. The approximately 3300 map units which are the major producing soils with slopes less than 25%. The types of information necessary to utilize a capitalized net income approach are as follows: YEILD INFORMATION CROPPING PATTERNS CROP PRICES NON-LAND PRODUCTION COSTS CAPITALIZATION RATE Factors used in Calculation • A seven year rolling average is used, with the highest and lowest numbers thrown out • Based on 4 crops- corn, beans,wheat, & hay • Yields Based on FSA Figures • Cropping patterns same every year – based upon slope • Crop Price - survey of elevators • Production Costs - from OSU farmer surveys • Capitalization rate - biggest influence on value Questions Should farm program payments be included in farm income ? Should timber have a separate valuation formula ? Conversion of CAUV Land • Failure to file renewal application • Failure of new owner to file initial application • Failure to qualify as land devoted exclusively to commercial agriculture use • If fallow -acts inconsistent with return to agriculture • EFFECT - land loses CAUV status and recoupment of preceding 3 years tax savings Current Agricultural Use Valuation (CAUV) Larry Gearhardt Ohio Farm Bureau [email protected]
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