Lyme
Property owners cannot be required to seek a special tax assessment for land already in the state’s current use program, officials from the New Hampshire Department of Revenue Administration told town leaders on Thursday.
The choice to enroll in such a program, they said, has to be entirely voluntary.
The letters were mailed to people who had a conservation easement on a portion of property that was enrolled in the state’s current use program.
Conservation easements place a permanent legal restriction on a property to prevent future development, while the current use program allows those parcels to be taxed at lower rates so long as their undeveloped use does not change.
Under current use, landowners can apply to the state for a lower property assessment in return for a promise not to develop open space, such as forests and farmland.
People quickly grew confused and contacted the state after receiving letters from the town early last week, said Stephen Hamilton, director of the state’s Municipal and Property Division.
“Upon reviewing the letters, they didn’t quite make sense to me either,” he said before a room of about 20 people at the Lyme town offices.
Lyme officials were concerned that the two types of protection — current use and conservation easements — couldn’t be combined on the same acreage. In their letter, they told landowners the state requires them to apply instead for a parallel, separate conservation assessment program.
“You sent a letter out to owners of property and told them ‘You have to file this form,’ and that’s not true,” Hamilton said. “That’s the essence of why I’m here.”
Several events disqualify land from being enrolled in current use, he said. For instance, land developed for homes is taken out of the program and charged a “land use change tax.”
But deeding a conservation easement onto current use property is not one of those disqualifying events, Hamilton said.
The Selectboard replied that the letter and attached paperwork was necessary in order to better classify and document how land is used in town.
Without people enrolled in the state’s conservation tax program, they argued, residents wouldn’t truly know how many parcels had easements, and how they differentiated from current use land.
“The gist of why we started this project was to disclose to the public the very different aspect of a deed restriction in perpetuity versus a temporary lien on the property in for form of current use,” Selectboard member Rusty Keith said.
Officials do have ways of compiling their own data, said Hamilton, adding they receive notice any time a deed changes hands or is amended.
“There’s nothing that limits you or prevents you from disclosing to the public people whose land is conserved under those conservation restriction easements,” he said, shortly before the board agreed to reissue a corrected letter.
The town’s discussion on current use comes as some officials question whether the roughly 45-year-old program should be reformed.
Proponents of the program argue it has served an important purpose, maintaining New Hampshire’s rural character and protecting about half the state’s land from development.
But with so many properties seeing reduced taxes, others contend, the cost of supporting local schools and municipal services falls on the remaining homeowners.
Almost 90 percent of land in Lyme is either non-taxable or enrolled in the state’s current use program, according to a 2016 report from the Department of Revenue Administration.
Roughly 11 percent of those properties are farmland, while another 85 percent is forestland, the report said.
Keith, the Selectboard member, estimates the lowered assessment of those lands results in $1.7 million in lost revenue.
That means Lyme property owners are paying an additional $5.08 in taxes per $1,000 of a property’s assessed valuation than they would without the current use law, he told voters during Town Meeting last month.
For a property valued at $250,000, that equals $1,270 in taxes.
Some lawmakers were hoping to determine the effects of current use statewide. However, attempts to form a study committee appear to have stalled in the Legislature.
A bill sponsored by State Rep. Francis Gauthier, R-Claremont, to form such a committee was tabled late last month after the state’s Assessing Standards Board said it wasn’t prepared for such an undertaking. Sen. Bob Giuda, R-Warren, also attempted to amend legislation to form a committee. That bill also tabled was in the wake of opposition from environmental and forestry groups.
“It’s not going to happen this year,” Giuda, who represents the Haverhill-area, told New Hampshire Business Review.
Keith on Sunday described the state visit as a slap on the hand that resulted in some mixed messages. The Selectboard, however, will retract the letters and reissue news ones with Hamilton’s help in the coming days.
Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.