New Hampshire’s Current Use Program is an essential tool for preserving the state’s unique landscape, rich agricultural history, and diverse ecosystems. The program offers property tax incentives to landowners who maintain their land in its natural state or use it for agricultural or forestry purposes. If you’re considering buying land in New Hampshire with Current Use status, it’s crucial to understand the implications, benefits, and potential challenges associated with this program. In this comprehensive guide, we will cover everything you need to know as a potential buyer of land in Current Use in NH.
Understanding the Current Use Program
- Purpose and Goals
The primary purpose of the Current Use Program is to conserve New Hampshire’s natural resources and maintain its rural character by discouraging the rapid conversion of open land into residential, commercial, or industrial development. The program achieves this by offering property tax incentives to landowners who maintain their land in its natural state or use it for agricultural, forest, or conservation purposes.
- Eligibility Criteria
To qualify for the Current Use Program, the property must meet specific acreage and use requirements. Generally, a minimum of 10 contiguous acres is required, although exceptions are made for agricultural land with lower acreage. Additionally, the land must be actively managed for agricultural, forest, or conservation purposes, following an approved management plan.
What to know when buying a property in Current Use
- Verify Current Use Status
When considering a property with Current Use status, it’s essential to verify the land’s enrollment in the program, which can be done through the local tax assessor’s office. Additionally, review the property’s management plan and consult with the landowner or a real estate professional to understand the obligations and restrictions associated with the Current Use status.
- Understand Tax Implications
Properties enrolled in the Current Use Program enjoy significantly lower property taxes, as they are assessed based on the land’s current use rather than its market value. As a buyer, it’s crucial to understand how this tax benefit will impact your financial situation and the property’s overall value. Keep in mind that if the land’s use changes or it is removed from the program, the property taxes may increase significantly.
- Assess Land Management Responsibilities
As a buyer, you will inherit the land management responsibilities associated with the Current Use status. Review the property’s management plan to understand the specific practices required to maintain the land, such as timber harvesting, agricultural activities, or wildlife habitat improvements. Consider whether you have the time, resources, and expertise necessary to fulfill these obligations.
- Factor in Potential Penalties
If you decide to change the land’s use or withdraw it from the Current Use Program, you may be subject to a land use change tax (LUCT). This tax is typically 10% of the property’s market value at the time of the change and can be a significant expense. Factor in this potential cost when assessing the property’s overall value and your future plans for the land.
- Consult with Professionals
Navigating the complexities of the Current Use Program can be challenging for both first-time and experienced property buyers. Consult with professionals such as real estate agents, foresters, and attorneys who are well-versed in the Current Use Program to ensure that you fully understand the implications of purchasing a property with this status.
- Evaluate Long-Term Goals
Before purchasing a property with Current Use status, carefully consider your long-term goals for the land. Are you committed to maintaining the property for agricultural, forestry, or conservation purposes? Or do you envision developing the land for residential, commercial, or industrial use in the future? Aligning your long-term goals with the restrictions and responsibilities associated with the Current Use status is critical to avoid unexpected costs and challenges down the road.
7. Be Aware of Local Regulations
In addition to the state-level Current Use Program, local regulations and zoning ordinances may impact your property and its uses. Consult with local authorities and review the town’s zoning and land use regulations to ensure that your plans for the property align with local requirements.
- Consider Financing Options
Securing financing for a property with Current Use status may present unique challenges, as some lenders may be hesitant to finance land with specific restrictions and obligations. It’s essential to discuss your plans with potential lenders early in the buying process to ensure that you can secure the necessary financing. Explore various financing options, such as agricultural loans or land conservation loans, which may be more accommodating to properties with Current Use status.
- Explore Conservation Easements
If your primary goal for purchasing a property with Current Use status is to conserve the land and protect its natural resources, consider exploring the option of placing a conservation easement on the property. A conservation easement is a legally binding agreement between a landowner and a land trust or government agency that restricts certain land uses and development. In addition to offering tax benefits, conservation easements can provide an added layer of protection for the land’s natural resources and help ensure its long-term conservation.
- Perform Due Diligence
When purchasing land with Current Use status, it’s essential to perform due diligence by conducting a thorough inspection of the property, including evaluating soil quality, water availability, and the presence of endangered species or critical habitats. Additionally, consider hiring a professional to conduct a timber cruise or agricultural assessment to determine the land’s productivity and potential income-generating capabilities.
Conclusion
Purchasing land with Current Use status in New Hampshire can be a rewarding investment for those committed to preserving the land’s natural resources and maintaining its rural character. However, it’s essential to understand the implications, responsibilities, and potential challenges associated with this program. By thoroughly researching the Current Use Program, seeking professional advice, and carefully considering your long-term goals, local regulations, and financing options, you can make an informed decision about whether a property with Current Use status is the right fit for your needs and aspirations. With thoughtful planning and a commitment to land stewardship, you can contribute to the conservation of New Hampshire’s treasured landscapes and enjoy the unique benefits that come with owning land in Current Use.
Additional Recources:
Follow this link to get a PDF copy of the Current Use Criteria Handbook.
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