Robert owns a 200-acre farm in Carroll County, New Hampshire, with 180 acres enrolled in Current Use under RSA Chapter 79-A and a farmhouse on the remaining 20 acres. He sells the entire property to a developer. The developer immediately files to remove all 180 enrolled acres from Current Use to build a residential subdivision. The full market value of the 180 enrolled acres is assessed at $900,000. Which of the following correctly describes the land use change tax obligation?
Correct Answer
A) The land use change tax is $90,000, assessed against the developer as the new owner at the time of removal from Current Use.
Under RSA 79-A:7, the land use change tax is 10% of the full assessed market value of the land at the time it is removed from Current Use. Calculation: $900,000 × 10% = $90,000. Critically, the land use change tax is assessed against the owner of the land AT THE TIME OF THE CHANGE IN USE — which is the developer (the new owner) who filed to remove the land from Current Use after purchasing the property. The developer, not the original seller Robert, is liable for the $90,000 land use change tax because the developer is the party who triggered the removal from Current Use.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
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