With 24.6 million acres of forestland, 90% of which is privately owned, Georgia leads the U.S. in timber harvest. But taxes are a thorn to Georgia’s forestry sector.
“Property taxes remain the top concern for private forest landowners in Georgia, because there are so many of us and we own so much of the land base,” said Bob Izlar, recently retired director of UGA’s Harvey Langdale Jr. Center for Forest Business.
Georgia timber producers could reduce their property taxes by enrolling in one of four tax programs available to them. | Photo by Jay Stone
Izlar outlined how property taxes are assessed on Georgia forestland and summarized four Georgia tax programs during the 2021 Ag Forecast.
Georgia forestland owners have access to four property tax incentive programs – Conservation Use Value Assessment (CUVA), Forest Land Protection Act (FLPA), Qualified Timber Property (QTP) and Agricultural Preference, all of which could reduce the amount participating landowners pay in property taxes.
Even if they participate in one of the tax programs, Georgia forestland owners are taxed at higher rates than their peers in neighboring states, Izlar said. He and colleague Yanshu Li published a study on Georgia property taxation rates in 2018 that shows on average, exemption participants pay $5.51 per acre, exceeding tax rates other Southeastern states by more than $1.50 per acre.
On average, Georgia forestland is taxed at $15.41 per acre if landowners do not participate in any of the tax incentive programs and pay taxes based on fair market value.
CUVA, FLPA, QTP and Agricultural Preference are well worth exploring, Izlar said.
THE FOUR EXEMPTION PROGRAMS:
3) FOREST LAND PROTECTION ACT
Land may be used for forestry. Minimum of 200 contiguous acres required, no maximum. Assessment at current use value. Georgia Department of Revenue (GDR) can make annual change of property value not to exceed 3% in a year. 10-year covenant is required, with penalties for withdrawing land from covenant.
1) AGRICULTURAL PREFERENCE
Land may be used for agriculture or forestry. 2,000- acre maximum, assessment at 75% of fair market value (FMV). 10-year covenant required, with penalties for withdrawing land prematurely.
2) CONSERVATION USE VALUE ASSESSMENT
Land may be used for agriculture or forestry. 2,000- acre maximum. Property tax rate determined using current use value. Georgia Department of Revenue (GDR) can make an annual change of property value not to exceed 3% in a year. 10-year covenant required, with penalties for withdrawing land prematurely.
4) QUALIFIED TIMBER PROPERTY
Land may be used for forestry. Minimum 50 acres is required; no maximum. Assessment is 175% of the CUVA. Agreement subject to annual certification. No penalty for withdrawing land from covenant.