🌲 In New Hampshire, the Current Use tax assessment is an open-space conservation measure designed to promote the preservation of undeveloped lands. Rather than valuing land based on its potential for development, such as housing 🏠 or commercial spaces 🏢, it assesses land based on its “productive capacity”, like farming 🌾 or forestry 🌳.
Should the use of the land change to something not qualifying for current use, like residential or commercial development, a land use change tax kicks in. This tax is hefty 💰, set at 10% of the full value of the land without considering its current use. The tax is levied at the moment the land use changes, making it additional to any regular property taxes 📈.
A vital thing to remember 💡 is that this tax isn’t imposed on the land itself, but rather on the change of its use. For instance, if land classified for agricultural use starts being developed for housing, the land use change tax will be applied. However, if it changes from one non-qualifying use to another, no additional land use change tax is required 🚫.
The specifics of what constitutes a “change in use” are defined broadly. Beginning construction 🚧 like building roads 🛣️, installing utilities 🔌, or even excavating the site for future buildings can trigger this tax. Even actions like selling excavated materials from the land can be considered a change in use. However, there are exemptions. Roads built for agriculture or forestry purposes, and the removal of materials for these uses, are not considered changes in use 🌲.
Furthermore, landowners have an obligation to inform local authorities 🏛️ if they are making any changes to their land, particularly if they’re removing soil or materials. This is not just about taxes but ensuring that local rules and environmental guidelines 🍃 are followed.
In summary, real estate agents should be well-aware of the implications of the Current Use tax assessment. Any development or change in the use of the land can result in significant tax implications, which can be a crucial factor for potential buyers or developers 🏗️. Being informed can save clients from unexpected costs and legal complications ⚖️.
Source: State of New Hampshire Current Use Criteria Booklet https://www.revenue.nh.gov/current-use/documents/cu-booklet-2023-2024.pdf
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