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.
