A Tennessee landowner sells agricultural land that had been enrolled in the Greenbelt program for the past eight years. The new owner plans to develop the land for commercial use. Which of the following best describes the likely tax consequence of removing the land from the Greenbelt program?
Correct Answer
D) A rollback tax may be assessed for up to three years of the difference between Greenbelt assessment and market value assessment
Under Tennessee's Greenbelt Law (Tenn. Code Ann. § 67-5-1001 et seq.), when land is removed from the Greenbelt program (due to change of use or sale for non-qualifying purposes), a rollback tax is assessed. This rollback covers the difference between the taxes actually paid under the Greenbelt assessment and what would have been owed at full market value assessment, for up to the three most recent years the land was enrolled. This recapture provision prevents abuse of the program while limiting the penalty to a reasonable look-back period.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Many states have laws to limit how much property taxes can increase each year, regardless of market value fluctuations.
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
A transfer tax is a tax imposed on the transfer of ownership of real estate.
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