Agricultural Land for Sale and large tracts of residential land for sale may sit on the market for months if not years in the current real estate market. Many of our clients are asking us what may be done to reduce the cost of owning raw land until the market improves. Here are just a few strategies that might be worth considering if you cannot expect to get your price in the next three to five years.
Hunting Lease. For large tracts of land in counties where the discharge of firearms is loosely regulated, a hunting lease may be worth considering. Private hunters or hunting clubs may be willing to cover the annual property taxes in return for exclusive use of the property during hunting season. Be sure to consult an attorney before entering into a lease. Hunting activities may make the property difficult to show to potential buyers, and adequate notice to adjoining propery owners and the general public is necessary to prevent accidents.
Timber Sale. In areas where active timber harvesting is taking place, some property owners may sell their timber for pulp wood. The value of the timber may be determined by a timber cruise. Other factors like distance to a mill, size of the tract, and access to roads may affect the value of the timber. It is important to note that the value of the land for sale will be greatly reduced directly after harvesting timber. The land will not show well for several years after cutting and the stumps left by the timber company may pose an additional cost for future land development.
Conservation Covenant. Each county in Georgia has a program whereby land may be put in a conservation program in return for reduced property taxes. The covenant usually requires the owner to agree not to subdivide, develop, or harvest timber on the land for a period of ten years. Some exceptions exist for instance, a single residence may usually be built on the property without violating the covenant. Be careful because the penalty for violating the covenant can be expensive. Check with the Tax Assesor in the county the property is located to determine the specific rules for that county. You may also get a written estimate of your tax savings before placing the property in the program.
Property Tax Appeal. At the beginning of each calendar year, each county provides a window of time to appeal the property tax assessment. With land prices falling, it may be a good time to try this approach to get your tax value in line with actual value. We offer assistance with this process and can give you an idea of what to expect. Be sure and contact us in plenty of time before the appeal period expires for your county.
Charitable Gift. If you cannot find a buyer for your land and none of the other approaches offer any relief, you may consider giving the property away. Gifts may be structured in many ways and a qualified financial planner should be part of this decision. For larger dollar tracts, a charitable remainder trust may be an option. Specific rules govern the value that can be assigned to the land and the tax deduction may need to be spread over several years depending on your individual situation. We can help you get in touch with the right people to explore this option.
Please give us a call or drop us an email if you have further questions about your agricultural land for sale.
