Understanding the Present-Use Value Program in North Carolina

The Present-Use Value (PUV) program is a tax incentive that allows landowners in North Carolina to reduce their property taxes if they are using their land for agricultural, horticultural, or forestry purposes. This program aims to help maintain rural land and ensure that landowners can continue farming, forestry, and horticultural activities without being forced to sell due to high taxes. Below is a comprehensive summary of how this program works, including who qualifies, the benefits, and the application process.

What is Present-Use Value?

Present-use value is a classification where land is appraised at its value based on its current use (agricultural, horticultural, or forestry) rather than its market value. This usually results in a significantly lower property tax bill. The difference between the market value and present-use value is considered “deferred” tax, which becomes due if the land ever ceases to qualify for the program.

Qualifying Land Uses

1. Agricultural Land:
   • Must consist of at least 10 acres that are actively used for producing agricultural products.
   • The land must produce at least $1,000 in gross income annually over the past three years to qualify.
2. Horticultural Land:
   • Requires at least 5 acres of land actively used for producing horticultural products (fruits, vegetables, nursery plants, etc.).
   • Similar to agricultural land, it must generate an average gross income of at least $1,000 annually over the previous three years.
3. Forestland:
   • Requires a minimum of 20 acres actively used for the commercial growing of trees.
   • A forest management plan is required to ensure that the land is being used in a sustainable, long-term manner.
4. Wildlife Conservation Land:
   • Requires a minimum of 20 acres managed under a written wildlife conservation plan approved by the North Carolina Wildlife Resources Commission.
   • It allows landowners to preserve the habitat of endangered species or manage the land for wildlife use.

Application Process

To apply for the Present-Use Value program, landowners must submit an application to their county assessor’s office by January 31st of each year. There are also provisions for applying within 60 days after the transfer of property or within 30 days of a change in property value. You’ll need to submit a variety of documentation, including management plans (for forestland and wildlife conservation land), proof of income (for agricultural and horticultural land), and maps of the property.

If the ownership of the property changes or if the land ceases to qualify, deferred taxes from the current year and the past three years must be repaid with interest. This is known as the “rollback” provision.

Compliance and Audits

Properties enrolled in the PUV program are periodically reviewed to ensure continued compliance. If the county assessor determines that a property no longer qualifies, it can be removed from the program, and deferred taxes will be due immediately. Regular audits are done to make sure that land use is consistent with the terms of the program.

Benefits of the Program

The primary benefit of enrolling in the Present-Use Value program is the potential for significantly reduced property taxes. By basing the value of the land on its use rather than market demand, landowners can maintain their land in agricultural, horticultural, or forestry use without the financial pressure to sell for development.

This is particularly beneficial in areas where property values are rising due to nearby development or other factors, as it ensures that rural land can remain in production and supports long-term land conservation.

Key Takeaways

• Eligibility Requirements: Land must be actively used for agriculture, horticulture, or forestry, and specific acreage and income thresholds must be met.
• Application Deadlines: Submit applications to the county tax office by January 31st annually or within 60 days of a transfer.
• Deferred Taxes: If the property is removed from the program, deferred taxes for the current and previous three years will become due with interest.
• Sustainability Focus: Especially for forestry land, sound management and long-term sustainability are key to maintaining eligibility.

For more detailed information, landowners should consult their local tax assessor’s office or visit the North Carolina Department of Revenue’s website to access the Present-Use Value Program Guide​.