Land
Use Change Tax
What is the Land Use Change Tax?
The Land Use Change Tax is a penalty tax charged when land is removed from Current
Use. It is 10% of the fair market value (not the sale price) of the land area
being removed, assessed at the time of the change in use. (RSA 79-A:7)
How is land removed from Current Use?
Land comes out of Current Use when it no longer qualifies. This happens when:
- actual construction begins on the site
- topsoil, gravel or minerals are excavated
from the site
- a parcel is subdivided and no longer qualifies
because it is less than 10 acres. (RSA 79-A:7 IV)
- Form A-5 (downloaded here)
Once
land is enrolled in Current Use it remains there forever unless
one of the three above criteria are met.
There are no buy-out options.
In the case of topsoil, gravel or mineral excavation, when the land is fully
reclaimed it can be re-enrolled in current use if it meets the enrollment criteria.
When Current Use land is subdivided, it remains in Current Use until construction
physically begins on the land, or a subdivided parcel too small to qualify for
Current Use is sold to new owners.
Who pays the Land Use Change Tax? RSA 79-A: 7 II states "The land
use change tax shall be due and payable by the owner at the time of the change
in use..." In other words, the owner at the time the land ceases to qualify
for Current Use.
I want to sell a 25 acre parcel of land enrolled in Current Use. Will I have
to pay a Land Use Change Tax? Will the new owner?
No Land Use Change Tax will be assessed for a change of ownership of a parcel
of land greater than 10 acres. Current Use "runs with the land", which
means it can change ownership as long as there are no physical changes to the
land and the parcel size still qualifies. However, a parcels enrollment in Current
Use must be disclosed to potential buyers. More information about this may be
found in the Current Use Handbook, Section 307.02. You may download this by following
this link.
I am clearing some of my Forest Land to turn it into fields. Since this is
a "physical change to the land" will I be assessed the Land Use Change
Tax?
No. Current Use land can change from one qualifying category to another. Be sure
to notify the town of the change of land use so they can properly assess the
parcel. (RSA 79-A:7 VI (c))
More information about this may be found in the Current Use Handbook, Section
301. You may download this by following
this link.
To review prior legal opinions on cases involving the Land Use Change Tax and their outcome, review here.
NH 2007 CU Statistics Report- LUCT removals and Conservation /General fund
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