If you own farm land, timber land, or recreational property, and you have no plans to develop your property into a residential or commercial use in the next 10 years, you may want to look into Georgia’s Conservation Use Assessment Covenant. It’s a great way to save a substantial amount of property tax every year.
From the Georgia Department of Revenue’s website: “This favorable tax treatment is designed to protect property owners from being pressured by the property tax burden to convert their land from agricultural [or other qualifying] use to residential or commercial use…” In other words, it’s intended to be an incentive to keep undeveloped land undeveloped.
An example of the tax savings: a 311 acre Burke County tract enrolled in the Covenant realized a 59% savings in property tax for 2015, (from $3355.63 to $1364.29). This property is mostly planted pines and young natural woodland, with some open areas, and is used for recreation and timber production.
The amount of potential savings varies from tract to tract and is based on the makeup of the property and other factors determined by the Georgia Property Tax Division.
It’s a 10 year Covenant wherein the landowner agrees to leave the property in a qualifying use for the 10 year period. It can be cancelled, or breached, but there’s a hefty penalty of twice the amount of tax savings that have been realized up to the point of the breach.
The rules can be tricky, especially when selling a property that is enrolled in Conservation Use. A lot of enrolled property is sold, but it has to be handled carefully so as not to cause a breach. We’ve handled numerous sales of Conservation Use properties, and we’re careful to keep Buyers and Sellers informed and include language in the sales contracts to help facilitate a smooth sale without a breach.
For more information about the program, see the Georgia Department of Revenue’s website: https://dor.georgia.gov/conservation-use-assessment-information, or feel free to call us to discuss our experience with it. For specific questions, it’s always a good idea to contact the Tax Assessor’s Office in the county where the property is located. They are the final authority on questions that arise.
A similar, newer program, is the Forest Land Conservation Use Covenant. It’s a 15 year Covenant with different minimum and maximum acreages, and is intended primarily for timber land. More information at: https://dor.georgia.gov/forest-land-protection-act-valuation.
Shivers Real Estate Investments, Inc.