What Does CAUV Mean?
In 1973 Ohio created the Current Agricultural Use Value program, more commonly known as CAUV.
What's CAUV about? Basically it's a way of encouraging farm land to stay farm land by reducing the tax burden on farmers.
For full details from the Warren County Auditor's site on the CAUV program just click the link.
In a nutshell, here's how the program works:
You (or someone) has to be actively farming a portion of the acreage you own for at least three years. It needs to be commercial farming, no putting down a family garden plot and claiming eligibility. If your acreage is 10 or less, you need to be able to demonstrate a minimum of $2500 per year of gross farm income. If greater than 10 acres you just need to show commercial use, no gross income threshold required.
Each Ohio county auditor should have information on their county's site about the program, applications and the rules for coverage. The owner fills out the form along with $25 for the initial application and sends it to the county auditor office between the first Monday in January and the first Monday in March. The auditor processes the application and if qualified, the taxes go down SIGNIFICANTLY. It varies county to county, but it's no small amount deducted.
Each year the auditor's office sends out renewal applications, fill it out (no renewal fee) and send it back to renew. Fail to return it and your CAUV approval lapses and your property returns to normal taxation rates.
And here's the wrinkle, if you let the CAUV lapse, then the county can (and will) collect 3 years of back taxes to complete the full rate of taxation for the last 3 years.
Basically, they don't want people going in and out of the program and gaming the system to get a tax break.
What does this mean to potential buyers of acreage? If you plan to farm there, no biggie. Keep the CAUV current and keep the tax break. But if you plan to buy current CAUV rated land and build a home on it, then someone is going to have to catch up on those 3 years of back taxes when the CAUV lapses. It's something to either factor in and know you're going to pay that tab, or you and your agent need to work out terms with the seller that address the tax issue.
Need help buying or selling a Warren County area home? Just give us a call at 513-520-5305 and we can chat about how we can best assist you!
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REALTORS(S) Serving Warren County Ohio & Adjacent Areas
The Liz Spear Team of RE/MAX Elite
Elizabeth & William Spear
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