The Forsyth County Board of Tax Assessors is grappling with how to locally manage changes to state law on the conservation use tax exemption.
The tax credit is intended to provide a reduced assessment, and tax bill, for those who are farming or preserving land.
The new procedure will remove each residence and a corresponding acre from a property when receiving the exemption.
The law takes effect for new applications, renewals and continuances in 2013.
Tax Assessor Mary Kirkpatrick said the board, which reviews the conservation use applications, had previously expressed concern about a residence falling under the exemption.
“We were looking at our own policy to cut this 1-acre house out internally when this law changed, and we stopped because the law had done it for us,” Kirkpatrick said. “But we started running into some questions that we were not quite sure of what stance to take.”
Under the new rules, if a conservation use property has a home on it, that home and 1 acre will be taxed at fair market value and the remainder will receive the exemption.
“I think the intent of this law … was to give people who … have 10 or 11.5 acres, with their $3 million house sitting in the middle of it looked at as a vacant piece of property and possibly qualify, but not let them have it on their big house and 1 acre,” Kirkpatrick said.
Properties with fewer than 10 acres, excluding any homes, must provide proof of acceptable activities for conservation use, while those with more than 10 acres will go through a less stringent process.
Reviewing the changes at a recent meeting, board member Rick O’Brien said the changes will simplify 90 percent of debates among the five-person panel.
“If you have 14 acres and a pretty good size house on it, is it a farm or a primary residence?” O’Brien said, summing up the discussions.
In the future, he said the board won’t be able to consider the house when reviewing an application.
The complications of applying the new law kick in primarily for properties with multiples homes or types of tax exemptions, Kirkpatrick said.
“When we’re calculating a tax bill, we’re having to use computers because it’s getting so sophisticated you almost couldn’t do it manually,” she said.
After discussing the application issues with the board, Kirkpatrick said she would review how the software could calculate the tax for a property with multiple homes.
The office will then develop a policy to handle the new conservation exemption rules.
“We need to know how to inform taxpayers,” Kirkpatrick said.
The changes in state law also allow for property owners to add an adjacent property into the conservation use covenant, which the county approved a policy for in March.