A Massachusetts farmer owns 50 acres of land in Berkshire County that is actively used for crop production. He applies to have his land classified under Chapter 61A. If approved, how will his land be assessed for property tax purposes?
Correct Answer
C) At its value in agricultural use rather than its highest and best use value
Under MGL Chapter 61A, land that is classified as agricultural or horticultural is assessed based on its value in current agricultural use rather than its highest and best use (which might be residential or commercial development). This preferential assessment significantly reduces the tax burden for farmers. If the land is later converted to a non-qualifying use, a roll-back tax (up to 5 years) is assessed to recapture the tax benefit.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
Homestead portability allows homeowners to transfer a portion of their accumulated homestead tax savings to a new homestead in the same state.
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- → The income approach to appraisal is most commonly used for which type of property?
- → Which formula correctly calculates the capitalization rate?
- → External obsolescence in Oklahoma:
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- → Which of the following correctly lists the three types of depreciation recognized in real estate appraisal?
- → The sales comparison approach to appraisal is most commonly used for which type of property?
- → Which four tests must a use satisfy to qualify as the highest and best use of a property?
- → Three depreciation:
- → Cap rate:
- → Which formula best represents the cost approach to appraisal?
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