Wednesday, September 7, 2011

Recognition and Tools:
Tax Credits and Deferrals

Stauber Farm
The Forsyth County Tax Office permits three categories of property tax deferrals based upon use value: agricultural, forestland and horticultural. Properties must meet certain requirements in order to achieve these classifications. Owners may qualify for agricultural deferments for land that is encompassed within a commercial farm that contains a minimum of ten acres and generates at least $1,000 of income from crop, plant or livestock production annually. The land may be cultivated, fallow or wooded. A forestland deferment necessitates that at least one 20-acre tract of an owner’s property must be actively utilized for commercial tree farming. Horticultural classification requires that a minimum of five acres should currently be used to grow fruit, vegetable, floral or nursery products.

Property tax deferrals are also available for resources designated as historic landmarks by local ordinances. Forsyth County’s historic landmarks qualify for a 50% property tax deferral in exchange for an owner’s agreement to maintain a resource’s historic character-defining features. Such agreements are codified as permanent deed restrictions.

The National Register of Historic Places program, administered by the National Park Service in conjunction with State Historic Preservation Office, allows for honorary inclusion in the roster of the country’s most significant historic properties. Resource owners who undertake sizable rehabilitations may qualify for financial incentives if the work meets certain federal standards. Owners of income-producing properties listed on the National Register individually or as contributing buildings within historic districts may be eligible for 20% tax credits at both the state and federal levels. Non-income-producing residential properties may apply for a state tax credit equal to 30% of the cost involved in their building’s rehabilitation. Tax credits are different than tax deductions, in that credits are applied toward the amount of state and/or federal income tax that the property owner is required to pay, while deductions lower the amount of income that is subject to taxation.

National Register properties that represent Forsyth County’s agricultural legacy include the Moravian communities of Bethabara, Bethania, and Salem as well as rural properties such as the Clayton Family Farm, the Thomas A. Crews House, the John Henry Kapp Farm, the John Jacob Schaub House, the Christian Thomas Shultz House and the Samuel B. Stauber Farm. Numerous other Forsyth County properties have been determined eligible for the National Register by their placement on the North Carolina Study List following historic resource survey update projects. At the conclusion of Phase II of the Forsyth County architectural survey update, 20 individual properties and two potential historic districts that reflect the county’s agricultural heritage were added to the North Carolina Study List. The resources vary from farms with substantial acreage to properties with notable dwellings and/or outbuilding complexes, but little residual acreage.

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