480-a Rule Changes

[Pete Collin]

Hello All,

The 480-a forest tax law is a New York state incentive to encourage landowners to practice good and intensive woodland management, and retain larger parcels and undeveloped tracts.  This year is the rollout for the new rules that govern the program.  They have been debated for about a decade now, being stalled by COVID, and filled with debate and rumor over what the new rules would be.  

The first, most important, thing is that the tax savings will be unchanged.  They have saved you about 80% off the assessment for those acres committed.  Therefore, you save on both school and property tax.  Early ideas were to make the tax savings smaller, but the rules less stringent.  That is not the case, you still retain the impressive tax break for enrolling.  There is also a minimum 50 acre parcel size.

The changes pertain mostly to the rules regarding scheduling and formatting of the work that must be done.  You must submit before September 1 to be eligible for the following year.  You must also submit your 5 year updates by Sept. 1.

Rather than having a year-by-year schedule for management activities (such as chainsaw culling or herbiciding of invasive species), you now have a 20-year plan that has two 10-year windows.  For example, if you have 100 acres, that may be broken into 3 distinct stands of similar timber character, a plan might say "In the first 10 years, you must go into Stands 1 and 2 to girdle the aspen.  In years 11-20, you must thin alternate rows of the spruce plantation that makes up Stand 3."  You still have severe penalties for not hitting your deadlines.

You still must report any timber sale, done according to a plan written by a forester, and must pay additional 6% taxes on the proceeds of that sale.

Most of the changes affect how the landowner's forester must format and file the applications and the plan itself.  We will have to give an electronic map of the property, with shapefiles of the property lines and stand boundaries.  

There have always been criticisms of the old way of doing the 480-a.  A landowner had to, and still has to know what they are getting into.  You are signing a lien on the property, with government agents watching what you do on your own property, and if you discover that you don't like it, it is probably too late.  You must buy your way out, or wait 10 years to get free of the lien.  But I have always carefully vetted my clients who showed interest.  For certain people the 480-a plan is ideal.  In general, it works best for families who plan on owning the land for a long time, if not generationally.  It works best if you have chainsaw skills, and a penchant for outdoor work.  And having patience with bureaucracy.  

Just putting this out here because I know some of you are enrolled already.