2012 Advanced Real Property SeminarNC Department of Revenue
Joseph S. Koury Convention CenterGreensboro, NC
September 21, 2012
Need for H 350Clarify existing statute –
105-275(12)Better define public
purpose/benefitGreater consistency
across stateReduce “carrying costs”
for land trustsIncentive to accept land
donations
Property Tax Uniformity - 2010In 2010, CTNC documented:
58 counties consistently exempting conservation properties
14 counties taxing conservation properties at market value
7,800 acres of conservation land taxed at market value
$94,000 in tax revenue
Qualifying Purposes Under H 350Used exclusively for one OR more of the following:
Scientific or educational purposesPublic access to pubic waters or trailsWildlife habitat conservationForest stewardshipSubject to a permanent conservation easement to
protect water qualityTransfer to government agency for permanent
conservation
Other Key Provisions in H 350Limited to nonprofits organized to receive and
administer lands for conservation purpose5-year deferred tax payments if property is
disqualifiedDisqualifying events:
Sold for development/no longer used for conservation Income produced not incidental to conservation purpose
No deferred tax payments when sold subject to an easement or transferred to government agency
Scientific and Educational PurposesPreservation of natural
flora and fauna for observation and study
Scientific and educational defined in NCGS 105-278.7(f)Research/experimentationNatural sciencesTransmission of
knowledge or skills
Public Access Hiking trails Coastal/river
Paddling/boating
Wildlife Habitat ConservationProperty managed under
a written habitat conservation agreement w/ NC Wildlife Resources Commission
Use process developed for Wildlife Land Conservation Program
None to date
Forest Stewardship Managed under a Forest
Stewardship Plan approved by NC Forest Service (NCFS)
NCFS has developed “Forest Stewardship Plan Review Form”
NCFS, private contractor, landowner, county resource agencies may develop plan
At least eight properties have qualified under this option
Water Quality EasementMust be under a permanent
conservation easement to protect water quality
Easement must meet requirements of Chapter 121, Article 4 of the NCGS
Many held by the NC Clean Water Management Trust Fund
Easements recorded with deed
More than 20 properties have qualified under this purpose
Transfer to Government Agency for Permanent ConservationLand being held for
transfer to government conservation agencies
National Park Service, US Forest Service, NC State Parks, Local Governments
Documentation of agency intent
Eight properties qualified under this purpose
Challenges AheadDetermining what is/is not income incidental to the
conservation purpose
hunting leasestimber revenuesmitigation paymentscarbon sequestration or other “ecosystem service”
payments
Conservation buyers programs
Other IssuesReclassification of previously exempt properties as
deferred under the new 105-275(12)
Application process?
Property tax listing schedule
Land being used for production agriculture