| Greg Hoidahl |
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| #1 |
Subject: Managed forest- The new 2c classification
Hey is every one that applied for the 2c Managed Forest classification aware that there is really very little tax savings ?!! It is true the acres that Qualify for 2c are taxed at the 65% rate, but then your county assessor will take away your homestead credit on those acres, resulting in minuscule tax savings. Honest, Check it out !!! |
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| Bruce ZumBahlen |
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| #2 |
Greg,
I am sorry the 2c Law didn't help you much.
Yes - I am aware of the consequences of losing homestead credit on those who have wooded acres as part of their homesteads when the woodlands are split classified from the homestead. The tax savings depend a lot on everyone's individual circumstances. A visit with the county assessor before applying can help avoid any surprises. But, the 2c has helped many woodland owners, particularly those not living on their wooded property like someone with wooded lakeshore with seasonal cabin where the wooded property is split classified away from the 10 acres with the cabin on the lakeshore.
The 2c Law also may not provide as much tax relief if the value of the property has significantly increased. It still can help, but it may not totally offset the higher taxes that results from an increase in appraised values. One of our MFA members reported his property taxes were more than he expected after his woodland was re-appraised to $5,400 per acre. That was what wooded land was selling for near his property. However, had he not been under the 2c law, his taxes likely would have been worse.
The outcome of the 2c Managed Forest Law wasn't exactly what we hoped for. We tried for a 0.55 of 1% rate similar to what the rate was for agricultural lands then (now its 0.5 of 1%), but we failed because some of the tax committee members felt it would have made too much of tax shift to other classes of property.
We can try again for a lower rate in a couple of years. We need to wait to let the dust settle from the recent changes in the Green Acres (GA) program that creates a new Rural Preserve for wooded acreage once covered by GA. I think that a case can be made to have the 0.65% rate on 2c lands more closely align with the class rate of 0.5% on Rural Preserve lands.
Bruce ZumBahlen
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| Eli Sagor |
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| #3 |
Bruce ZumBahlen has an article with a bit more information on the Green Acres program in the October/November 2009 Minnesota Forestry Association newsletter. You can download the newsletter from http://www.minnesotaforestry.org/Newsletters .
-eli
Eli Sagor
University of Minnesota Extension
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