A BETTER
REFLECTION OF THE
FARM ECONOMY
New Land Values Will
Lower Property Taxes
For Ohio’s Farmers
The way farmland is valued under Ohio’s when some crop prices had fallen as much as HB 49 took effect in September 2017 and
Current Agriculture Use Value (CAUV) 50 percent. will be phased in over six years. It makes
program changed last year when Governor
changes to the CAUV formula and is geared
John Kasich signed HB 49, the State of Ohio’s Leah Curtis, policy council for Ohio Farm to lowering the CAUV land values. All in all,
Operating Budget, into law. In addition to Bureau, explained that the decision to push it’s a pretty nice win for the farm owners.
setting the budget for various state agencies,
Moving forward, the new law will ensure
that:
the legislation effectively changed the CAUV
formula, which will be phased in over
six years.
•
calculation of the formula will be tied
Ohio’s CAUV program encourages farmland
to the farm economy, rather than the
preservation and discourages the conversion
of land for development purposes. To that
•
end, the program is designed to estimate the
Because most farms are family-owned
the generations, holding assumptions
for agriculture, instead of its “best” potential
use (such as development). As a rule, valuing
•
the land in this way results in a lower tax
were increased from five to 25 years.
Equity
assumptions,
specific equity data from the United
in areas where farmland is in demand for
development purposes.
•
States Department of Agriculture.
CAUV
land
used
for
year-round
conservation practices or enrolled in a
According to the Ohio Department of
federal land retirement or conservation
Taxation, to qualify for the program, a
program for at least three years, will
landowner must meet one of the following
now be valued at the lowest of values
requirements during the three years preceding
assigned on the basis of soil type.
an application for the CAUV.
10 or more acres of your land must be this particular piece of legislation through
devoted exclusively to commercial came as the tax bills for farmland owners
agricultural use. were coming due and taxpayers were coming
Your farm must produce an average up short. The advocacy group stated that
yearly gross income of at least $2,500 (if interest rates were being held down at the
fewer than 10 acres are used exclusively federal level and farm prices were higher as a
for commercial agricultural use). result of a few good years and the decline of
Give me a call to learn more about this recent
change and to find out how it will impact your
property tax obligation.
residential values.
The Ohio Farm Bureau reported that between
2008 and 2014, Ohio farmers saw a 307 “The formula was becoming disconnected
percent increase in property taxes at a time from the farm economy,” said Curtis.
Rise & Shine • Summer 2018
were
interest rate, will now be based on farm-
valued below market value – especially
2
which
previously based on the general federal
bill for farm owners as the land is usually
•
general financial markets.
and operated and passed down through
value of a property by only considering its use
•
Financial market data used in the
by: Mark Fearon,
CPA, CGMA
122 Fourth Street NW
P.O. Box 1020
New Philadelphia, OH 44663
330.308.6894
[email protected]