Large increases in the Current Ag Use Value (CAUV) of farmland throughout Ohio in 2023 has resulted in higher property taxes (some have seen significant increases) for farmland owners in 2024. Forty-one of Ohio’s eighty-eight counties will see property tax increases in 2024 due to higher CAUV. Several factors have led to this increase in ag use valuation.
The Current Agricultural Use Value (CAUV) Program is a differential real estate tax assessment program for owners of farmland. The program allows for the farmland parcels to be taxed according to their use value in agriculture (or their value related to income from agriculture) rather than the market value (defined as the value if the land were sold by a willing seller to a non-related willing buyer). To arrive at this “use value”, a formula is used that includes several variables to capitalize the net income from agricultural products.
Landowners with farmland and woodlands in Ohio are eligible to sign-up for the CAUV program through their county auditor’s office if they meet the requirements.
There are two paths for a parcel to qualify for the Current Agricultural Use Valuation (CAUV) Program. To qualify for CAUV, land must meet one of the following requirements during the three years preceding an application.
•Ten or more acres must be devoted exclusively to commercial agricultural use; or
•If under ten acres are devoted exclusively to commercial agricultural use, the farm must produce an average yearly gross income of at least $2,500.
Each of the approximately 3500 different soil types in Ohio is assigned a CAUV value each tax year. The value represents the expected net present value of an acre of land devoted solely to agricultural production for the dominant field crops in Ohio. To determine this value, an average of yields and prices for corn, soybeans, and wheat is used to determine gross income. Non-land costs are then subtracted from gross income for a measure of net income. Finally, this net income is divided by a capitalization rate based upon recent values of farm interest and equity rates.
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Categories: Ohio, Crops, Corn, Soybeans, Wheat