Current Agricultural Use Value, or CAUV, can bring tax relief to some Ohio landowners.
A CAUV designation can significantly reduce the real property taxes owed by the landowner, especially if the land is in an area where housing or commercial uses are alternative uses for the land.
1How to qualify
To qualify, the land, during the three years prior to a CAUV application, must consist of 10 or more acres devoted exclusively to commercial agricultural use; or consist of less than 10 acres devoted exclusively to commercial agricultural use and produce, or be expected to produce, an average yearly gross income of at least $2,500.
The owner, including new owners, must file an initial application with the county auditor.
Renewal applications must be filed for each consecutive year to maintain CAUV status. The county auditor may also refer to the CAUV application as “DTE Form 109”; many county auditors now have the forms available online.
Commercial animal or poultry husbandry; aquaculture; apiculture (beekeeping); the production for a commercial purpose of timber, field crops, tobacco, fruits, vegetables, nursery stock, ornamental trees, sod, or flowers.
Or the growth of timber for a noncommercial purpose, if the land on which the timber is grown is adjoined to land devoted exclusively to agricultural use.
Biodiesel production, biomass energy production, electric or heat energy production, or biologically derived methane gas production if the land on which the production facility is adjoined to land devoted exclusively to agricultural use, provided that at least 50 percent of the feedstock used in the production was derived from parcels of land under common ownership or leasehold.
Land devoted to and qualified for payments or other compensation under a land retirement or conservation program under an agreement with an agency of the federal government.
Land may sit idle or fallow for up to one year (and even for up to three years in certain circumstances) if, during the previous three consecutive calendar years, it has been designated as land devoted exclusively to agricultural use.
Also, nothing can be done to the land that would hinder its return to agricultural production.
If the land no longer qualifies, Ohio law requires landowners to pay an amount equal to the amount of the tax savings on the converted land during the three tax years immediately preceding the year in which the land is converted to non-agricultural use.
When one buys land from a farmer and then uses the land for something other than farming, the land will lose its CAUV status and “recoupment” will be triggered. The buyer and seller should work together to determine who should be responsible for the tax payback to avoid any misunderstandings.
Sources: Ohio Department of Taxation.
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