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How Vermont’s Use Value Appraisal Program Can Benefit Your Forestland : Taxing

The Use Value Appraisal Program, also known as Current Use, “enables landowners who practice long-term forest management to have their enrolled land assessed for property taxes based on its value for forest management rather than its fair market (development) value.” Once enrolled in Vermont’s Use Value Appraisal Program and working with a forester, tax savings become available.

The tax savings realized varies according to the size of the parcel.  For example, 40 forested acres valued at $50,000 ($1,250/acre), taxed at a median tax rate in Vermont, would normally have a tax bill around $1200 annually.  Enrolled in the program, rather than being taxed at a value of $1,250/acre, forest land enrolled in UVA is taxed at a value of $187/acre, resulting in a tax bill around $160 annually, for an annual tax savings of $1090. 

In the case of a larger parcel, a sample piece of land is around 400 acres in size, valued at $362,000 ($905/acre).  The annual tax bill, at the same rate as the previous example, would be $8,145 annually.  If the land was enrolled in the UVA program, the land would be taxed at a Use Value of $187/acre rather than $905/acre, and the annual tax bill would be around $2095, for an annual tax savings of $6,050. 

These examples, when projected over the 10-year period of a Forest Management Plan, would result in total tax savings of $10,900 for the 40 acre parcel, and more than $60,000 for the 400 acre parcel. 

These examples only account for the taxes on the land.  The value of the home is not considered here, and the actual savings would vary according to town, total municipal tax rate, the common level of appraisal, and if you have agricultural or open land, which are taxed at a higher use value.  What they do illustrate is the savings that are possible when forest land is enrolled in the Use Value Appraisal Program.  

For a more detailed explanation, and how to apply these calculations to your own property, refer to this document from the Vermont Department of Taxes