C.A.U.V Program (Current Agricultural Use Value)

WHEN DOES THE PROPERTY BECOME
SUBJECT TO RECOUPMENT?

There are two general reasons for recoupment:

1. failure to reapply for the C.A.U.V. program
   
2. if a change in the parcel’s use occurs so that
   the land is no longer used exclusively for
   agricultural purposes.

At that point, the Auditor will notify the owner and recalculate
the property’s value.

HOW MUCH IN TERMS OF TAX REDUCTION,
MIGHT I EXPECT?

The actual reduction depends on the
Current Agricultural Use Value that is
placed on the land. Some major factors
affecting the value are slope, drainage and
related characteristics. The State Tax
Commissioner uses a seven year market
cycle for calculating and adjusting the
C.A.U.V. values. This cycle adjusts values
due to changing agricultural production
costs and commodity prices. The resulting
C.A.U.V. land value replaces the appraised
value. The land’s tax value is set at 35% of
the C.A.U.V. value.

The fair market value normally depends
upon establishing the value for the property
based on comparing it to recent sales of
similar properties. The C.A.U.V. system
capitalizes the expected net income
received from agricultural production to
value the property.

WHAT ARE SOME OF THE MAJOR ADVANTAGES
OF THE C.A.U.V. PROGRAM?

(1) It provides tax relief on agricultural land.

(2) If the tract of land contains woodland as
well as cropland, the C.A.U.V. Law will
often provide a greater tax relief than
the Ohio Forest Tax Law because that
law only applies to the forest land
acreage.

(3) In some special circumstances, land
currently under the C.A.U.V. program
can lay idle for up to one year prior to
being subject to recoupment.

What are Some of the Disadvantages?

(1) The owner must file annually to keep
the exemption.

(2) If the land use changes to non-
agricultural or if the owner fails to
reapply for the C.A.U.V. program, there
is a recoupment penalty equal to the
past three years tax savings.

(3) Tracts under 10 acres can qualify only if
the gross annual income from sales of
agricultural ucts is at least $2,500.

Copyright 1995 by The Appraisal Research Corporation