Many rural properties are eligible for what is called a special assessment or deferral if the property is "used exclusively for farm use" or "used for the predominant purpose of growing and harvesting trees of a marketable species". The purpose of these programs is to provide a financial incentive to property owners, in the form of reduced property taxes, for keeping their land in agricultural or timber production.
There are two separate farm use programs, one for properties that are zoned exclusively for farm use (EFU) and another for properties that are zoned something other than for exclusive farm use.
There are two distinct forest land special assessment programs for Western Oregon. The first is called Western Oregon Forest Land and Privilege Tax (WOFLAPT) and the other is Small Tract Forestland (STF).
The Oregon Department of Revenue has information on all of these programs on their web site.
Frequently Asked Questions
I just purchased property under a special assessment program. If I fail to meet the requirements for the special assessment, am I responsible for prior year's taxes if the property is disqualified?
Yes, the special assessment is attached to the land and the potential tax liability is transferred to the buyer at the time of the sale.
Can I get an estimate of taxes for disqualification to see what the potential tax liability may be?
No, we do not currently have the staffing and resources to calculate the potential tax liability unless it is actually being disqualified. You can, however, calculate a rough estimate by subtracting the properties current real market value less the current assessed value, apply the tax rate for your tax code area, times the maximum number of years that can be collected (10 years for Exclusive Farm Use, 5 years for all other programs).
I received a farm income questionnaire, however I just purchased this property. Who is responsible for obtaining the income information?
It is the current landowner's responsibility to obtain income information. You may need to contact your realtor or the seller to assist you in filling out the questionnaire.
What happens if I am unable to meet the income requirements or obtain the income information from the previous owner?
If you are farming, the land will be assessed at market value and the disqualification tax will be "abated". This means that for each year you farm the property, one year of the additional tax is forgiven and after five years there is no additional tax remaining. If you meet the income requirements for 3 out of the last 5 years, you may reapply for the special assessment. If you do not farm the property, the disqualification tax amount will remain as a lien but will not be added to the tax statement unless the land changes to a use in which it could not be returned to farming.
I just received a farm income questionnaire, however my property is zoned exclusive farm use. Do I have to farm the property to retain the farm use special assessment?
Yes, although properties that are zoned exclusive farm use do not require an application and are not required to meet minimum income requirements like non-EFU zoned properties do there still must by farming activity taking place to qualify for the special assessment. You must be using the property "exclusively for farm use" in order to qualify.
What constitutes "used exclusively for farm use"?
Oregon Revised Statute 308A.056 gives a comprehensive definition of "farm use". In part it entails "...the current employment of land for the primary purpose obtaining a profit in money". In other words you have to be actively farming the property and attempting to make money from it. One cow on 100 acres is not enough to qualify. If the land does not qualify it can be disqualified from farm use assessment and assessed at the property's full market value.
The property I purchased was logged prior to the sale. How can I continue to qualify for special assessment as forestland?
Land that has been logged must be replanted within two years and must meet the minimum stocking requirements as set by the state forester. You need to submit a forest management plan with your application.
What is a forest management plan?
A forest management plan explains how the land is being maintained for the best growth of the trees such as clearing brush, spraying weeds, etc. if the parcel has been logged, the plan must also include the month and year it will be planted and the type of seedlings that will be used.
The application for designation of land as forest Land asks if the property has been platted under ORS Chapter 92. What is ORS Chapter 92?
ORS Chapter 92 are the statutes governing the creation of subdivisions and partition plats.