The Present-Use Value program is a statewide program designed to give relief to specific landowners and their property that is used for the commercial production of an agricultural, horticultural, or forestry product. To qualify, there are ownership, acreage, income, and sound management requirements that have to be met. There are also penalties for removal from the program. For a comprehensive guide of the program, released by the NC Department of Revenue, click here.
Typically, the owner must own the land for 4 full years prior to the January of application. There are a few exceptions to this requirement:
If an owner’s primary residence is on the property and the owner is living in the residence, application may be made the year following acquisition provided all other requirements can be met.
If an owner owns other land (within 50 miles) that is enrolled in the Present-Use Value program, the owner may apply during the January following acquisition. This is provided that the new property is being used for the same purpose as another qualifying tract.
If you receive property from a relative, the time that the relative owned the property may count towards your 4-year requirement.
- INITIAL APPLICATION: Must be made during the month of January.
- CONTINUED USE APPLICATION: When a property transfers ownership, an application to continue in the program must be filed within 60 days of the date of transfer.
The size requirements are as follows:
- HORTICULTURE: At least 5 acres in active, horticultural production.
- AGRICULTURE: At least 10 acres in active, agricultural production.
- FORESTRY: At least 20 acres in active, forestry production.
As a general rule, only 19.99 acres of woodland may be included in an agricultural unit. Woodland in excess of 20 acres must be under a sound forest management plan.
Once a qualifying tract is enrolled, smaller tracts may “piggy-back” onto the qualifying tract, provided both are in the same use.
The qualifying agricultural or horticultural tract must produce an average of $1,000 of gross income per year. Along with initial application, 3 previous years of income must be provided.
Typically, land assessed for present-use value will be 10%-50% of market value.
A property may be removed from the Present-Use Value program if any one of the four requirements (ownership, size, income, or sound management) is not met. A property may also be removed voluntarily or removed if the compliance review forms, along with necessary information, are not returned to the Tax Office. When a property is removed from the program, the amount of taxes that were deferred for the current year and previous 3 years will come due with interest.
Note: “Current year” refers to the year the property is removed or disqualified.
The owner must continually meet the requirements of the program. The Catawba County Tax Office periodically reviews properties for compliance with the program’s requirements. Additional information may be required at that time. Additionally, the owner must notify the Tax Office if there is a change in use of the property.
The Catawba County Tax Office will periodically mail out Compliance Review forms. Agricultural and horticultural tracts will require production and income verification. Forestry tracts will require information that the management plan is being actively followed. A field visit may occur to verify information. The forms and requested information must be returned to the Catawba County Tax Office to avoid disqualification from the program.
Provided the buyer is a qualifying owner, they may file an application within 60 days of the date of transfer to continue enrollment. The new owner assumes the deferfment and nothing comes due. If the new owner doesn’t qualify or doesn’t want to continue, deferred taxes will come due.