April 8, 2016

OLR Report Compares Connecticut and Vermont Land Preservation Property Tax Programs

Municipal property tax assessors assess most property based on its fair market value, which can fluctuate with the real estate market. If the law allows, assessors may assess other property based on how it is currently used, regardless of its potential fair market value. Assessments based solely on property’s current use are often lower than assessments based on a property’s fair market value, a difference that could result in lower property taxes. States authorize current use assessments to encourage property owners to conserve certain types of land by shielding it from market forces that could increase the assessment and consequently the taxes.

OLR Report 2016-R-0021 compares Connecticut’s and Vermont’s programs for assessing agricultural, forest, and open space land at its current use value. Connecticut’s 490 Program allows farm, forest, open space, and maritime heritage land (i.e., classified land) to be assessed at its current use value, which municipal assessors determined based on a schedule the Office of Policy and Management prepares in consultation with the Department of Agriculture.  Owners of classified land that change its use or sell within 10 years after it was classified must pay a conveyance tax penalty.

Vermont’s Use Value Appraisal (UVA) program allows certain agricultural, forest, and conservation land and farm buildings to be assessed at the current use value.  A state Current Use Advisory Board annually establishes the land values that municipal assessors must apply. Property owners must file a 10-year management plan for forest or conservation land and annual activity reports.  The state imposes a fee on the owner if he or she develops the land.   The state annually pays each municipality a stipend to offset the property tax revenue lost due to the UVA program.

Click here to read the full report.