Thomas owns a 200-acre parcel of forested land in Carroll County, New Hampshire that is enrolled in the Current Use program under RSA Chapter 79-A. He sells the land to a developer who plans to subdivide it into residential lots. Which of the following best describes the tax consequence triggered by this sale?
Correct Answer
A) A land use change tax equal to 10% of the full market value of the land is triggered when the property is removed from Current Use.
Under RSA Chapter 79-A, when land is removed from the Current Use program — whether by sale for development, change in use, or other qualifying event — a land use change tax (LUCT) is triggered. The LUCT is assessed at 10% of the full market value of the land at the time of the change. This tax is separate from and in addition to the standard NH Real Estate Transfer Tax.
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Related Concepts
Fee simple absolute is the highest and most complete form of property ownership, giving the owner unrestricted rights to use, possess, enjoy, and dispose of the property. It is of unlimited duration and fully inheritable.
Community property is a system where property acquired during a marriage is owned equally by both spouses.
A freehold estate represents ownership of real property with an indefinite duration.
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