About the NC Present-use Tax Deferment Program: This program is offered to forest landowners. A sound forest plan provides good forest management practices for eventual timber harvest and reduces the property’s real estate taxes each year by a considerable amount, often less than half of the full market assessed rates, depending on several variables.
Qualifications: To qualify for the forest-use tax deferment, the subject property must have:
1) Minimum 20 acres with potential timber production to include:
a) old fields growing back into productive forest
b) all “stand types” with variable soils, timber age, size, density, species composition and logging history.
2) Minimum 4-year ownership, if the property is not the owner’s primary residence
3) 60 days to apply for continuing deferment, by the new landowner of property purchased with an existing forest plan, for consideration to re-enter the program. The old plan may require some revision.
Important Timing... NOW is the time to get your plan prepared, for the 2019 tax year. Applications for forest management plans are only received during the month of January for that year’s land taxes. There are many more details pertinent to each individual forest property. If you would like to a) get a sound working plan for your forest, or b) update your present plan, please give me a call. I look forward to working with you on your forest land.
Who Writes Forest Plans?
Forest plans may be prepared by:
1) the state Forest Service
2) registered foresters
3) the landowner himself, utilizing a qualified natural resource professional for consultation and document preparation.
With Bachelor’s degrees in biology and environmental sciences from ASU and in forest management from NCSU, I write conservative plans more comprehensive than mere timber harvest prescriptions. As a forest naturalist, I view each woodland holistically as a complex living community of soils, wildlife, commercial timber and non-timber species in a broader context of watershed, human recreation and aesthetic values. The emphasis and specifics of each forest plan vary with individual landowner’s objectives. As a real estate broker, I can prescribe to protect the long term value of the property.
Deferred Tax Rates: The deferred tax amount prescribed by the tax department for each forest property varies according to their determination of value. Tax (and deferred) rates are based on: soil type, neighborhood location, the amount of acreage in forest use, and other site specifics. When forest land under the present-use program is sold, the last 3 years’ deferred taxes become due. If the new owner applies within 60 days, the deferment can be transferred with appropriate revisions, thus saving the 4-year waiting period. Annual real estate taxes continue to be deferred for the property each year, as long as it remains in compliance with the forest plan guidelines and objectives.
Environmental Planning: Effective land management conserves the relatively shallow soil base of steep mountain watersheds. Quality trout waters are subject to erosion caused by poor logging practices. Better management enhances timber quality and growth, as well as a diversity of wildlife populations. The best plans are customized for each forest property, in keeping with beneficial timber harvest practices and the specific land-use objectives of the individual land owner.
Need to Update: Many existing forest plans on the tax books for years are out of date, and need to be reviewed, to determine if the landowner is working with the guidelines of his or her forest plan. Progress is being made toward evaluating older forest plans.. A forest management plan should be reviewed every five years, to be current. If any deferred acreage is removed from timber production, or if part of the deferred acreage has been sold, adjustments should be made.
Timber Harvesting: To qualify for entrance into the program, an agreement is made to have the property’s timber harvested at some point in the future. Actual harvest dates depend on several variables including timber age, growth rate, stand density, accessibility, site specifics and again, landowner objectives. Some owners may decide to go with a longer harvest rotation, for increased revenues at a later date. The owner-preferred time to harvest timber depends on several factors: growth rate, biological maturity, timber market conditions, the landowner’s needs, etc. Clearcutting, i.e., removing all the merchantable and non-merchantable timber from a site, is not normally desired or recommended for privately owned mountain forests and watersheds. A forest owner may choose to have a) only the larger dominant trees harvested, specifying perhaps a 18-20” minimum stump diameter, or b) only the marked trees, rather than the more conventional practice of cutting everything above a 14” limit. The more conservative practice removes only the largest trees, leaving a healthy, denser stand of co-dominant trees rapidly growing toward forest crown-closure and future harvesting. The real estate sale value is also higher for less heavily timbered land.
Stewardship of the Land: All these naturally interwoven components comprise a healthy forest and thus should all be included in a sound forest management plan that the owner will be pleased to use. A good plan is actually a tool for interpreting and enjoying the forest land as it grows and changes with the years, under our responsibility of wise stewardship of the natural resources entrusted to us. Mature ownership of valuable forest land is not all about real estate potential, timber revenues, or saving money on annual land taxes. Mountain forests also offer higher and more lasting values.