A Vermont farmer enrolls 150 acres of forestland in Vermont's Current Use Program (Use Value Appraisal) under 32 V.S.A. Chapter 124. He later sells the property to a developer who plans to convert the land to a residential subdivision. Which of the following best describes the tax consequence triggered by this change in use?
Correct Answer
D) A land use change tax is triggered upon withdrawal from the Current Use Program, based on the fair market value of the land.
Under 32 V.S.A. Chapter 124, when land enrolled in Vermont's Current Use Program (Use Value Appraisal) is withdrawn from the program — whether due to a change of use, development, or voluntary withdrawal — a land use change tax is triggered. This tax is calculated as a percentage of the fair market value of the land at the time of withdrawal. The tax is designed to recapture some of the property tax savings the landowner received while enrolled. The enrollment runs with the land, but development or a change in qualifying use triggers the tax.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The bundle of rights describes the rights associated with property ownership, allowing owners to use, control, enjoy, exclude others from, and dispose of the property.
Community property is a form of ownership recognized in certain states where property acquired during marriage is considered equally owned by both spouses, regardless of who earned the money or whose name is on the title.
Condominium ownership involves owning a unit of airspace within a multi-unit building plus an undivided interest in the common elements shared with other unit owners. Each unit is separately taxed and financed.
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