Vermont

Property Classification:

The Vermont statutes do not specifically dictate classes of property that are subject to different assessment ratios or tax rates, however certain types of property are treated differently for valuation and assessment purposes.

Vermont property tax law provides special tax treatment to encourage and assist the maintenance of Vermont's productive agricultural and forest land, to prevent the accelerated conversion of these lands to more intensive use by the pressure of property taxation at values incompatible with the productive capacity of the land, and to achieve more equitable taxation for undeveloped land.

For purposes of this discussion the following definitions apply:

Housesite - means the two acres of land surrounding any house, mobile home or dwelling

Use value appraisal - means, with respect to land, the price per acre which the land would command if it were required to remain henceforth in agriculture or forest use. With respect to farm buildings, "use value appraisal" means zero percent of fair market value.

Managed forest land -

(A) means any land, exclusive of any house site, which is at least 25 acres in size and which is under active long-term forest management for the purpose of growing and harvesting repeated forest crops in accordance with minimum acceptable standards for forest management and as approved by the Commissioner; or

(B) any land, exclusive of any housesite, which is:

i. certified under 10 V.S.A. § 6306(b);

ii. is owned by an organization that was certified by the Commissioner of Taxes as a qualified organization as defined in 10 V.S.A. § 6301a and for at least five years preceding its certification was determined by the internal revenue service to qualify as a Section 501(c)(3) organization which is not a private foundation as defined in 26 U.S.C. § 509(a); and

iii. is under active conservation management in accord with standards established by the Commissioner of Forests, Parks and Recreation.

Managed forest land shall be eligible for use value appraisal if the land is subject to a forest management plan, or subject to a conservation management plan in the case of lands certified under 10 V.S.A. Section 6306(b). The plan must be filed with and approved by the department of forests, parks and recreation by October 1, and provide for continued conservation management or forest crop production on the tract for at least 10 years. Upon the expiration of a ten-year plan, the owner shall file a new plan for at least the next succeeding ten years to remain in the program

Agricultural land - means any land, exclusive of any house site, in active use to grow hay or cultivate crops, pasture livestock or to cultivate trees bearing edible fruit or produce an annual maple product, and which is 25 acres or more in size except as provided below. Any agricultural land that meets the requirements is eligible for use valuation. There shall be a presumption that the land is used for agricultural purposes if:

A. it is owned by a farmer and is part of the overall farm unit; or

B. it is used by a farmer as part of his farming operation under written lease for at least three years; or

C. it has produced an annual gross income from the sale of farm crops in one of two, or three of the five, calendar years preceding of at least:

a. $2,000.00 for parcels of up to 25 acres; and

b. $75.00 per acre for each acre over 25, with the total income required not to exceed $5,000.00;

c. exceptions to these income requirements may be made in cases of orchard lands planted to fruit producing trees which are not yet of bearing age.

Application: Generally, owners of managed forest land or agricultural land must apply to the Director of Property Valuation and Review by September 1 of the previous tax year for the property to be eligible for use value appraisal.

Once a use value appraisal is granted, it remains in effect until the property is no longer eligible or until there is a change of use. The Director must determine if previously classified property is still eligible for use value appraisal and whether the amount of the previous appraisal is still valid. An owner of eligible land may withdraw it from use value appraisal. (Sec. 3756, Tit. 32, V.S.A.)

Change in use: (Sec. 3757, Tit. 32, V.S.A.)

Land that has been classified as agricultural land or managed forest land under the program shall be subject to a land use change tax upon the development of that land. The tax shall be at the rate of 10% of the full fair market value of the changed land determined without regard to the use value appraisal.

Owners of enrolled forestland that is harvested contrary to the management plan or the silvicultural standards may be subject to the land use change tax on the acres cut contrary. The remainder of the acres in the forestland category become ineligible for use values for a period of five tax years. The property may be re-enrolled after fives tax years with a plan that addresses the current forest conditions.

When a property is enrolled in the program, the State records a lien on the property in the town records. This lien guarantees that Vermont can collect the land use change tax if the land is developed. Landowners who wish to remove the lien must pay the land use change tax to clear the title.

If an owner withdraws land that has not been developed, then no land use change tax is due. Landowners wishing to withdraw property from use value appraisal are encouraged to plan ahead when submitting their discontinuance notices.

Valuation and Assessment:

If the parcel of land meets the requirements above the land will be valued based on its current use rather highest and best use. Forest land is classified as either "productive forest land" or "non-productive forest land." Agricultural land is classified as either "agricultural land" or "non-productive agricultural land."

Land values are reviewed annually and determined by the "Current Use Advisory Board" who take into account the class, type, grade and location of the land along with its productive and income producing abilities.

Transfer of Ownership

An owner of land enrolled in the current use program may transfer the land to another person or entity, but a new application to the current use program must be submitted if:

• enrolled land is transferred and is to remain in the program by the new owner

• a portion of the property is retained by the original owner and is to continue to be enrolled by the original owner

The state of Vermont does not have a severance or yield tax on timber or timber products.

Vermont Department of Forests, Parks and Recreation. 2017. Use value appraisal of forestland in Vermont.

Vermont Department of Taxes. Current use program. https://tax.vermont.gov/property-owners/current-use