Georgia Amends Conservation Use Property Law

Georgia property tax legislation amends provisions governing bona fide conservation use property.

Underlying Property of a Residence

The entire value of any residence and its underlying property continues to be excluded from the “bona fide conservation use property” definition. Further, the legislation prohibits a board of tax assessors from requiring a recorded plat or survey to set the underlying property’s boundaries.

Property Under 10 Acres

Owners of property under 10 acres must continue to submit additional relevant records regarding proof of bona fide conservation use for qualified property that on or after May 1, 2012, is:

  • first made subject to a covenant, or
  • is subject to a renewal of a previous covenant.

Also, additional records are still not required if the owner provides proof that they have filed with the IRS a:

  • Form 1040 Schedule E, reporting farm related income or loss,
  • Form 1040 Schedule F with Form 1040, or
  • Form 4835.

However, the legislation adds that additional records are not required if the owner provides proof that they have:

  • incurred expenses for the qualifying use, or
  • generated income from the qualifying use.

Property 10 Acres or More

Effective July 1, 2018, a tax assessor cannot require the owner of a tract, lot, or parcel of land totaling at least 10 acres to submit additional records of proof of bona fide conservation use for qualified property that on or after May 1, 2012, is:

  • first made subject to a covenant, or
  • subject to a renewal of a previous covenant.

Appeals of Applications for Current Use Assessment

The legislation provides several new criteria for appeals of applications for current use assessment.

If a final determination on appeal to a Georgia superior court is to approve an application for current use assessment, the taxpayer recovers litigation costs and reasonable attorney’s fees.

If a final determination on appeal results in a reduction in taxes and the taxpayer being owed a refund, the tax commissioner must pay the refund within 60 days of the determination with interest.

If a final determination on appeal results in additional tax being owed, the taxpayer has 60 days to pay the tax commissioner following the postmark of the adjusted bill.

Breaches of Covenant

The legislation addresses breaches of covenant related to bona fide conservation use property.

If a final determination on appeal to a Georgia superior court is to reverse a board of tax assessors decision to enforce a breach of the covenant, the taxpayer recovers litigation costs and reasonable attorney’s fees.

No penalty is imposed until the appeal of the board of tax assessors’ determination of breach has ended.

After the final determination on appeal, the taxpayer has 60 days from the issuance of the bill to make full payment. After this, interest accrues from the original due date until the bill is fully paid, plus any late fees and penalties.

Family Owned Farm Entities

Owners that are family owned farm entities may elect to discontinue the qualifying use of a property on or after July 1, 2018.

A family owned farm entity making an election can avoid penalties for a breach of covenant if it has:

  • renewed at least once, without lapse, the covenant for bona fide conservation use;
  • kept the property in a qualifying use under the renewal covenant for at least three years; and
  • a current shareholder, member, or partner who has reached age 65.

The shareholder who has reached age 65 must have held a beneficial interest in the property through the family owned farm entity since the time the covenant immediately preceding the current covenant was entered. However, the shareholder may hold the beneficial interest directly or indirectly.

The written election takes effect when filed with the county board of tax assessors.

S.B. 458, Laws 2018, effective July 1, 2018

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AUTHOR

CCHTaxGroup

All stories by: CCHTaxGroup