Planning and Development Committee
Finance, Revenue and Bonding Committee
AN ACT CONCERNING THE ASSESSMENT OF HORSES AND PONIES AND FARM MACHINERY AND THE TRANSFER OF LAND CLASSIFIED AS FARM LAND, OPEN SPACE LAND, FOREST LAND AND MARINE HERITAGE LAND
SUMMARY: This act makes procedural changes to the “490 program,” in which eligible farm, forest, open space, and maritime heritage land is assessed for property tax purposes based on its current use, rather than its full market value.
The act also:
1. allows municipalities to exempt all horses and ponies from local property taxes, regardless of their use;
2. expands the mandatory property tax exemption for farm machinery;
3. extends the application deadline for property tax exemptions for farm machinery, horses, and buildings for farmers granted an extension to submit their personal property tax declarations; and
4. makes technical changes.
EFFECTIVE DATE: October 1, 2014, and applicable to assessment years starting on or after that date.
§§ 3-6 — 490 PROGRAM CHANGES
Application Deadline for Forest Land Classification
By law, landowners seeking to have their land classified as forest land under the 490 program must (1) hire certified foresters to determine and report if the land meets state standards and (2) include a copy of the report with their 490 program applications. The act requires the forester's report to be signed and dated no later than October 1.
The act also repeals a requirement that landowners submit the applications by October 1. The repealed provision conflicts with another statute that requires owners to file the application between September 1 and October 31, unless the town is in a revaluation year, in which case, the application must be filed by December 30 (CGS § 12-107d(f)).
Change of Ownership
The act requires landowners to file a new, rather than a revised, 490 program application with the town assessor whenever any type of land in the program is sold.
Excepted Property Transfers
With some exceptions, the law imposes a conveyance tax on farm, forest, open space, and maritime heritage land in the 490 program that is sold or transferred within 10 years of its classification. The conveyance tax does not apply to certain transfers under the law, including those (1) for no consideration within a family, (2) resulting from a land owner's death where no consideration was received for the land, or (3) resulting from a foreclosure.
In the case of any transfer not subject to this conveyance tax (i. e. , excepted transfers), other than those due to foreclosure, the act specifies that the 10-year period is measured:
1. for open space or maritime heritage land, from the date on which the land received its 490 program classification, and
2. for farm or forest land, from the earlier of the date on which the (a) transferor received title to the land or (b) land received its 490 program classification.
The act also requires individuals who obtain title to land as a result of an excepted transfer to notify the town assessor by completing a form prescribed by the (1) agriculture commissioner, for farm and open space land; (2) state forester, for forest land; or (3) Office of Policy and Management secretary, for maritime heritage land. Landowners who obtain title to classified forest land must also submit a certified forester's report evaluating the property's 490 program eligibility, unless such a report was submitted within the 10 years before the transfer.
Deadline for Tax Assessor to Report to Town Clerk
Prior law required tax assessors to annually, by November 30, file with the town clerk a certificate for any land classified under the 490 program. The act extends this deadline to January 31 for any year in which a revaluation of all real property becomes effective.
§§ 1 & 2 — PROPERTY TAX EXEMPTIONS FOR HORSES AND FARM MACHINERY AND BUILDINGS
By law, horses and ponies are considered taxable personal property, subject to certain exemptions. Existing law exempts from the tax (1) horses and ponies used exclusively for farming and (2) the first $1,000 of assessed value for those used for other purposes. The act allows a municipality, by vote of its legislative body (or in a municipality where the legislative body is a town meeting, by vote of the board of selectmen), to fully exempt all horses and ponies from property taxes, regardless of their use.
Farm Machinery
Prior law required municipalities to exempt from property taxes farm machinery, other than motor vehicles, valued at up to $100,000. The act expands this exemption to up to $100,000 in assessed value, which by law equals 70% of its fair market value. By law, municipalities may grant an additional exemption of $100,000 of assessed value for such machinery (CGS § 12-91(b)).
To qualify for the farm machinery exemptions, farmers must individually or as a part of a group, partnership, or corporation, derive at least $15,000 per year in gross sales from the farming operation or have incurred at least $15,000 in farm-related expenses in the most recent assessment year before the assessment year to which the exemption applies.
Deadline for Applying for Farm Machinery, Horse, and Building Exemptions
By law, farmers must apply annually, by November 1, for property tax exemptions for farm machinery, horses, and buildings. The act extends this deadline for farmers who have been granted a filing extension for their personal property declarations, to the extended deadline set by the assessor.
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