By Thomas P. Caldwell, InDepthNH.org
CONCORD — The Current Use Advisory Board has endorsed proposed changes in current use rates for tax year 2022-23 that represent modest increases in the forest land categories. Farmland would remain at its 2021-22 rate.
The board establishes the current use amounts through a series of public hearings, taking into account changes in the value of the land’s assets, such as timber.
Current use taxation is aimed at conserving farmland and forests by taxing the property based on how it is used today, rather than what its market rate would be if it were fully developed. The current use law was enacted in 1973 after residents of the Granite State approved a constitutional amendment in 1968 aimed at slowing development and preserving open space.
In recent years, there has been a backlash against current use, especially in municipalities like Lyme, where large percentages of the property are taxed on current use. They argue that granting tax breaks to large landowners forces other taxpayers to carry the burden of paying for schools and municipal services.
Proponents say that, without current use, many families would be unable pay their taxes and would be forced to sell their property to developers, which would create a need for additional public services and push municipal budgets higher.
During the board’s Nov. 3 public input session in Lancaster, one speaker said he was a seventh-generation farmer who wanted to leave his property to his daughter, but he said without current use, she would not be able to afford to keep the farm.
The board has held three public input sessions to hear from residents about the proposed rate changes, and during the final one on Nov. 5, both Jasen Stock of the N.H. Timberland Owners Association and Rob Johnson of the N.H. Farm Bureau Federation spoke in support of the new rates.
Under the proposal, farmland would continue to be assessed at between $25 and $425 per acre.
Forest land would be assessed between $123 and $185 per acre for white pine, $64-96 per acre for hardwood, and $40-60 for other species. That represents a $1 increase for white pine and hardwood, while other species remain the same.
Forest land with documented stewardship would be assessed at $74-111 for white pine, $38-58 for hardwood, and $24-36 for other species. That represents a $1 increase for white pine. Hardwood would remain the same on the low end, with a $1 increase on the high end. Other trees would be assessed at the 2021-22 level.
Wetlands remain unchanged at $24 per acre.
By approving those rates on Friday, the Current Use Board is ready to present the recommendations into the administrative rule-making process which will involve another set of public hearings in advance of adoption. The goal is to have new rates by April 1 when next year’s property valuations are set by the towns.
Meanwhile, the Department of Revenue Administration is in the process of setting communities’ 2021 tax rates. The first tax rates were set in mid-October and will continue through December.
While current use taxation saves landowners money while the property remains undeveloped, they pay a penalty of 10 percent of the “highest and best use” value if they later take the property out of current use in order to develop it. A provision of the law allows a community to earmark a portion of the land use change tax for conservation efforts.
In order to qualify for current use taxation, there must be at least 10 acres of land beyond the portion used as a residence and “curtilage” — the area used for the well, septic system, driveway, and outbuildings. Smaller tracts qualify if used for growing crops with a value of at least $2,500, if it is a certified tree farm of any size, or if there are unimproved wetlands of any size.
An additional 20 percent reduction in the assessment is possible if the landowner grants recreational use of the land that allows hunting, fishing, hiking, skiing, snowshoeing, and nature observation. Board members noted that, while it sounds like a large percentage, it amounts to about $15 on a 60-acre parcel. They also said those recreational uses include 7,000 miles of snowmobile trails over private land, and that recreation on those properties generate $600 million in state revenues.