By Brandon Ashley, Advocacy & Policy Development Coordinator
There are so many acronyms out there, it’s hard to keep them all straight. One acronym that is critically important to Georgia farmers is CUVA, or the Conservation Use Value Assessment.
As property values began to skyrocket in the 1980s, farmers were finding it increasingly difficult to pay property taxes in order to maintain their farming operations. Property taxes were based on fair market value (FMV), causing excessively high property taxes for land devoted to farming. In 1992, the CUVA program was instituted to as a way to offer property tax relief for landowners.
CUVA is one of the most important programs available to Georgia farmers. Having farmland enrolled in CUVA helps keeps farmers on their land, creates less burden on a county’s service requirements, and maintains green space for the environment.
1. First off, what is CUVA? The Conservation Use Value Assessment, or CUVA, is a ten-year covenant (or agreement) where a landowner pledges to maintain land in a qualifying use in exchange for property tax values based on the land’s productivity, not the FMV.
2. So, if you enroll in CUVA, do you still pay property taxes? Yes, land that is enrolled in the CUVA program must continue paying property taxes, albeit at a reduced rate.
3. Can any type of land be enrolled in CUVA? No, only certain kinds of land uses are eligible for the CUVA program. To qualify for CUVA, land must be owned by a U.S. citizen and must be used for farming, commercial production of agricultural products, and/or timber.
4. How are land values for CUVA determined? This gets complicated, but there is a formula regulated by the Georgia Department of Revenue in consultation with other government agencies. CUVA tax values are determined based on location in the state and soil quality.
5. How do you enroll in CUVA? Consult with your local tax assessor between January 1 and April 1. You can enroll tracts of land up to 2,000 acres.
6. If I breach the covenant, are there penalties? There are stiff penalties if you violate your CUVA covenant and use the land enrolled in the program for another use that isn’t allowed. For any breach of your covenant during the 10-year period, the landowner may be subject to pay steep penalties (up to double the cumulative difference in property taxes plus interest). Any breach would be against the entire tract of land, not just the area where a breach occurred.
7. Is CUVA a burden to local county governments? No. Though CUVA reduces property tax revenues, it does not create a financial burden on the counties where there are enrolled properties. According to data collected by Dr. Jeffrey Dorfman from the University of Georgia, farmland almost always pays more in taxes for the services it receives than residential land.
On average, in nearly two dozen studies around Georgia, farmland pays approximately $2.60 in property taxes for each $1.00 in services it receives. In contrast, residential land pays $0.70 in taxes for every $1.00 in services it receives. If a farm was sold and subdivided, more tax revenue would come in. But more services would be required from the county in the form of more sewers, roads, fire protection, schools, libraries, etc.
8. What other benefits are there of CUVA? There are many environmental benefits of the CUVA program. This program encourages land to remain in green space and prevents urban sprawl. In 2010, there were 166,206 parcels of land enrolled in the CUVA program.