CAUV Current Agricultural Use Value

Transcription

1 CAUV Current Agricultural Use Value Sponsored by: TERRY HABERMEHL CLINTON COUNTY AUDITOR Speakers: Richard H. Hoffman, ASA, CAE, MAI, CRE, FRICS Richard F. Hoffman, Esq.

2 WHAT ARE WE GOING TO DO? 1. Real Estate Tax Planning 2. CAUV Detail From Your Questions 3. Review recent tax bill changes 4. Answer your questions

3 6-YEAR VALUATION CYCLE Triennial Revaluation Year 4 Year 5 Year 6 Year 1 Year 2 Year Triennial Update of values effective Jan. 1. Pay Dec. of this year and July of next year New construction & destruction added to tax duplicate New construction & destruction added to tax duplicate Revaluation completed effective Jan 1. Pay Dec & July of following year New construction & destruction added to tax duplicate New construction & destruction added to tax duplicate

4 RECENT TAX BILL CHANGES 2013 BI-ANNUAL BUDGET CHANGES 10 %and 2 ½ % Rollback November 2013 Going Forward Renewal vs. Replacement

5 CAUV HISTORY When CAUV was adopted in 1974 it was designed to reduce values by approximately 50% In 2005 CAUV provided a 90% reduction in value In 2010 the reduction was 77% In 2014 the reduction was 62%

6 WHO SETS CAUV VALUE? OHIO DEPARTMENT OF TAXATION AGRICULTURAL ADVISORY COMMITTEE COUNTY AUDITOR

7 CROPLAND HISTORY SAMPLE CROPLAND VALUES WOODLAND VALUES Abr. Soil Type D if f erence % D if f erenc BhA BIRKBECK 1,520 3,470 1, % 1,020 2,970 1,95 BhB BIRKBECK 1,350 3,110 1, % 850 2,610 1,76 BmA BLANCHESTER 1,180 2,850 1, % 430 2,100 1,67 CaD2 CASCO % CbB CELINA 1,180 2,830 1, % 680 2,330 1,65 CbB2 CELINA 990 2,430 1, % 490 1,930 1,44 CcA CELINA-CROSBY 1,370 3,140 1, % 870 2,640 1,77 CeB CELINA-LOSANTVILLE 1,050 2,620 1, % 550 2,120 1,57 CeB2 CELINA-LOSANTVILLE 830 2,140 1, % 330 1,640 1,31 CmA CLERMONT 1,020 2,520 1, % 270 1,770 1,50 CpA COBLEN,RF-PH 1,890 4,180 2, % 1,390 3,680 2,29 CrB CORWIN 1,360 3,100 1, % 860 2,600 1,74 CtA CROSBY-CELINA 1,350 3,110 1, % 350 2,110 1,76 CtB CROSBY-CELINA 1,230 2,970 1, % 230 1,970 1,74 CuC2 CROUSE-MIAMIAN 980 2,410 1, % 480 1,910 1,43 CuD2 CROUSE-MIAMIAN 800 2,090 1, % 300 1,590 1,29 DuA DUNHAM 2,110 4,570 2, % 1,110 3,570 2,46 DhA DUNHAM,OV-PH 2,010 4,380 2, % 1,010 3,380 2,37 EkC2 ELDEAN 520 1,550 1, % 200 1, EgB ELDEAN 880 2,230 1, % 380 1,730 1,35

8 WHY THE INCREASE? Yield Adjustment (catch up) Lower Prices Leaving Formula Higher Prices Joining Formula Lower Cap Rates

9 FACTORS CAUV FORMULA Average Yield Data Average Cropping Patterns Average Crop Prices Average Non-land Production Cost Average Capitalization Rate

10 TIMEFRAME DTE uses a seven-year Olympic average The high and the low years removed 2014 Years 2006, 2007, 2008, 2009, 2010, 2011, Years 2009, 2010, 2011, 2012, 2013, 2014, 2015

11 YIELD ADJUSTMENT FACTORS Base year = 1984 (Used from ) Annual adjustment since year statewide yield average Data from Ohio Department of Agriculture

12 AVERAGE YIELD For 2014 Values BASE 1984 AVERAGE % INCREASE BASE CORN BEANS WHEAT Source: USDA/National Agricultural Statistics Service

13 WHAT IS AGRICULTURAL USE? OHIO REVISED CODE SECTION Must be for a commercial purpose Animal or poultry husbandry, aquaculture, apiculture, commercial timber or timber contiguous to other qualifying land, field crops, tobacco, fruits, vegetables, nursery stock, ornamental trees, sod, or flowers Land devoted exclusively to biodiesel production, biomass energy production, electric or heat energy production, or biologically derived methane gas

14 EXPLANATION OF THE CALCULATION OF VALUES FOR VARIOUS SOILS (2014) CAUV land values are calculated by the capitalization of net income from agricultural products assuming typical management, cropping and land use patterns, and yields for given types of soils There are approximately 3500 different soil types with slopes of 25% or less

15 FACTORS IN FORMULA

16 CROP PRICES USED IN FIVE YR. AVERAGE Source: Ohio Agricultural Statistics Service Crop Year CORN SOYBEANS WHEAT 2013 $ 5.67 $ $ $ 7.45 $ $ $ 6.40 $ $ $ 5.55 $ $ $ 3.70 $ 9.60 $ $ 3.95 $ 9.60 $ $ 3.95 $ $ $ 3.30 $ 6.25 $ $ 1.80 $ 5.55 $ $ 1.85 $ 5.15 $ $ 2.45 $ 7.20 $ $ 2.50 $ 5.45 $ $ 2.00 $ 4.40 $ 2.50 Source: Ohio Department of Taxation & Ohio Agricultural Statistical Service

17 NON LAND PRODUCATION COST Base & Added Unit, Variance CORN $ $ BEANS $ $70.61 WHEAT $ $62.54

18 Capitalization Rate TY Mortgage/Equity Ratio 60/40 60/40 Interest Rate, 15-Year Fixed Rate Mortgage* Equity Rate** Tax Additur Capitalization Rate 7.6% 6.2% *Rate for a MultiFlex mortage loan from Farm Credit Services. **Equity rate is the prime lending rate plus 2%. Source: Ohio Department of Taxation

19 CAPITALIZATION RATE

20 Cropland, Average CAUV Dollars per Acre $2,000 $1,500 $1,205 $1,668 $1,000 $500 $262 $180 $123 $249 $505 $700 $719 $ Source: Ohio Department of Taxation

21 Average CAUV and Ohio Cropland Value - USDA Dollars per Acre, $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 $5,700 $5,000 $4,140 $4,400 $4,050 $3,190 $2,270 $2,630 $1,205 $700 $719 $262 $180 $249 $505 $ Source: Ohio Department of Taxation

22 Crop Yields/Cropping Pattern Soil yields from 1984 are adjusted by the 10-year average of actual yields per acre for Single crop pattern for most soils based on the most recent five-year average of acres harvested, : Corn 38.6% Soybeans 52.0% Wheat 9.4%

23 Gross farm income, production expenses, and net farm income, inflation adjusted, e $ billion (2009) e 14e Note: Data for 2013 and 2014 are estimates. Data as of February 11, Source: USDA, Economic Research Service, Farm Income and Wealth Statistics.

24 Source: Ohio Department of Taxation