Property taxes have been among the top concerns for forest landowners in Georgia for many years. For many of them, property taxes represent the most significant annual costs associated with forestland ownership. Three preferential tax programs have been established to help qualifying landowners reduce their property taxes: the Preferential Agricultural Assessment program, the Conservation Use Valuation program (CUVA), and the Forest Land Protection Act program (FLPA).
Thanks to a recent law change, forest landowners in Georgia now have another option to consider when it is time to conduct their property tax planning. The change was brought by House Resolution 51 and its enabling legislation (House Bill 85) passed in 2018. A new class of real property–Qualified Timberland Property (QTP)–was created for ad valorem tax purposes. Qualifying forest landowners can start an application beginning in tax year 2020. An unusual feature of this law is that it vests the appraisal of QTP properties with the state and not the county. This would improve uniformity of timberland valuation for ad valorem tax purposes in Georgia.
Why some forest landowners should consider QTP
For most private timberland owners in Georgia, keeping their properties in the current preferential taxation programs would in general give them the greatest tax benefits. Some timberland owners, however, may find the new program beneficial.
Different from forest properties under the aforementioned preferential tax programs, QTPs are not subject to long-term covenants or tax penalties. This provides flexibility to forest landowners who manage their timberland for timber production but have concerns about a long-term commitment with the county. Some forest landowners may also benefit from enrolling their timberland in the program due to disqualification for other preferential tax programs (e.g., acreage limit). Some owners find the program beneficial if the fair market value of timberland for ad valorem taxation is inflated due to the erroneous inclusion of standing timber value or speculative uses.
A general rule of thumb is to compare your current property tax bill to 175% of the property’s FLPA value. See Li et al. (2020) for the table of FLPA values. If the former is higher, it is very likely that enrolling in the program could help save property taxes on your timberland.
How QTPs are valued
Once certified as QTPs by the Georgia Department of Revenue (GDOR), the properties will be appraised at their QTP values according to the QTP Appraisal Manual. Each year, a table of per acre QTP appraised values by ecoregion and soil productivity will be compiled by the specially trained staff appraisers of the GDOR. The proposed QTP values for 2020 are presented in the table below.
See Li and Izlar (2020) for more details about eligibility, method of appraisal, the 2020 QTP appraised values, and application procedures.
Li, Y., and R.L. Izlar. 2020. Qualified Timberland Property: A new property class for Georgia forest landowners to consider. Warnell School of Forestry and Natural Resources, University of Georgia, Athens, GA.