Agricultural Rollback Taxes Rules Have Changed

Haynsworth Sinkler Boyd, P.A.
Contact

Haynsworth Sinkler Boyd, P.A.

Effective January 1, 2021, rollback taxes on real property converted from agricultural use to some other use will be imposed in the year of change in use and the three (3) preceding years.
 
Prior law required rollback taxes be imposed in the year of change in use and the five (5) preceding years. While on its face this change in the law might be deemed a benefit to taxpayers, it may also result in the loss of the agricultural use exemption for a number of taxpayers.

Under prior law, a change in use which triggered the rollback was described as “when real property which is agricultural use is applied to a use other than agricultural.” There had to be a change in use to trigger the rollback tax.

Under the new legislation, rollback taxes are triggered when “real property which is in agricultural use is applied to a use other than agricultural “As evidenced by actions taken by the owner of the real property which is inconsistent with agricultural use.”

The test under the new legislation is not a change in use, but rather “actions taken by the owner which is inconsistent with agricultural use.” A myriad of examples come to mind of actions taken by the owner which are inconsistent with agricultural use particularly with regards to recreational properties. A property with a pond owned by a fishing club and used for fishing, a property with rice fields owned by a duck club and used for duck hunting, a property used as a riding academy, property owned by a quail hunting club and used for quail hunting, a rural property with a vista used as a wedding venue, and the list goes on. Property owners currently benefiting from the agricultural use exemption may well be hearing from their county tax assessors after January 1, 2021.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Haynsworth Sinkler Boyd, P.A. | Attorney Advertising

Written by:

Haynsworth Sinkler Boyd, P.A.
Contact
more
less

Haynsworth Sinkler Boyd, P.A. on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.