Many times a year, people will ask us when they have 10+ acres how to get the CUVA tax break. We also have homeowners ask us what happens if they break the CUVA they are under by building a structure/something outside the guidelines of what you can and cannot do when under CUVA tax break.
What is CUVA and where did it come from? We have something similar on my family farm in Wisconsin. Just this week, I had a client call on understanding this in Milton and I also just yesterday filed our similar tax break on our family Wisconsin farm so it made me think of blogging this. Background: In the 1980's values really started going up on homes and farmers subsequently had a hard time paying taxes. In 1992, the CUVA program was instituted as a way to offer them tax relief on property. It is a 10 year agreement where the owner of the land pledges to maintain land in a qualifying use in exchange for the property tax values based on the land's productivity, not fair market value. Our family has done something similar with the dairy farmers that lease our land on our farm. Our family chose to make it fair to our farmer tenants with cattle and the lease amount is equated to the price of beef so everyone feels good.
To get the break you must be a US Citizen and be using the land for farming, commercial production of agriculture products or timber. It gets complicated when calculated: CUVA tax values are determined based on location in the state and soil quality. You can apply Jan 1 to April 1 any year of ownership and can apply with 10 to 2,000 acres.
If you violate the terms, you have steep penalties- up to double the cumulated difference in property taxes plus interest. The breach is against the full land tract, not just the area of violation.
On average, in nearly two dozen studies around Georgia, farmland pays approximately $2.60 in property taxes for each $1.00 in services it receives. In contrast, residential land pays $0.70 in taxes for every $1.00 in services it receives. If a farm was sold and subdivided, more tax revenue would come in. But more services would be required from the county in the form of more sewers, roads, fire protection, schools, libraries, etc.
There are many environmental benefits of the CUVA program. This program encourages land to remain in green space and prevents urban sprawl. It helps farmers keep their land as well in areas of higher taxes- Milton is a great example of this with large value growth year after year.
Have a great day and thank you for reading! Happy to answer any questions or find the answer for you- you can reach me anytime at 404-840-7354.
Jenny
LINK TO CITY INFORMATION: Conservation Use Assessment Information | Georgia Department of Revenue
