All landowners who qualify for Current Use Valuation are entitled to have their land valuedaccording to its current use (agriculture, forestry, or environmentally sensitive) instead of the FairMarket Value for ad valorem taxation. This can reap large tax benefits. Another benefit of CUVA isthat the value changes are limited to +/- 3 percent a year and a total of +/- 34.39 percent over the lifeof the 10-year covenant.

All landowners who qualify for Agricultural Preferential Assessment are entitled to have their propertyvalued for assessment at 75 percent of FMV for ad valorem taxation. In most cases, 25 percent taxsavings will be realized with Agricultural Preferential Assessment. However, Agricultural PreferentialAssessment values change as fast as FMV changes and offer no degree of certainty on the propertytax burden.

Agricultural Preferential Assessment applies to all land and up to $100,000 dollars in building valueon agricultural production and storage buildings. Current Use Valuation applies only to landvalues and has no effect on building values. A taxpayer that has a small amount of land with a goodnumber of agricultural buildings, such as chicken farming, may receive greater benefits underAgricultural Preferential Assessment.

• Natural or Naturalized Citizens
• Family Farm Corporations who earns at least 80% of their income from farming
• Non-profit conservation organizations, estates and trust may be eligible

• The nature of the terrain
• The density of the marketable product on the land
• The past usage of the land
• The economic merchantability of the agricultural product
• The utilization or non-utilization of recognized care, cultivation, harvesting, and like practices
• applicable to the product involved and the implementations of any plans

The land uses required for Current Use Valuation are good faith agricultural/forest productionand environmentally sensitive land including:

• Raising, harvesting or storing crops
• Feeding, breeding or managing livestock or poultry
• Producing plants, trees, fowl or animals
• Production of aquaculture, horticulture, floriculture, forestry, dairy, livestock, poultry andapiarian products
• Maintaining a wildlife habitat (additional requirements may apply)

Must use 50% or more of the property in a qualifying use.

Once your application is approved, the filing fee previously collected and the covenant agreement willbe placed on record in the Clerk of Superior Court Office of Muscogee County. A title search of yourproperty should show that your property is under covenant. This is for the protection of both thepotential seller and/or buyer who may not be aware of the covenant, and any penalties that may occurdue to a transaction.

Forms and details are available at the County Board of Assessors Office. You can come by and pickone up or one will be mailed to you upon request. The Board of Assessors requires the followingwhen submitting your application:

• Application must be signed by all landowners along with percentage of ownership
• Application must be notarized
• Applicant must designate on tax map the exact parcel and acreage being placed incovenant
• Applications for less than 10 acres, must be accompanied by additional proof ofagricultural or forestry use to be considered
• $25.00 Recording Fee collected upon filing of the application to the Board of Assessors.Money order, cashier check or business checks only. The Clerk of Superior Court does notaccept personal checks.

You enter a 10-year covenant with the County whereby you agree to continue your property inagricultural or forestry production.

The earliest anyone may sign up for Current Use Valuation or Agricultural PreferentialAssessment is January 2 of each year. The filing time runs from January 2 until April 1.

In addition, every taxpayer receives an annual assessment notice. You may make application alongwith, or in lieu of an appeal, during the 45-day appeal period. This must be done within 45 days ofthe date of your annual assessment notice.

Up to 2,000 acres in Georgia can be entered in Current Use covenants. At the same time, up to2,000 other acres in Georgia may be entered into Agricultural Preferential Assessment. Presently thereis no minimum acreage for Current Use Valuation.

But, landowners with less than 10 acres must give additional proof that the "primary use" of theproperty is for bona fide agricultural production purposes. If you file Internal Revenue ServiceSchedule E, reporting farm related income or loss, or a Schedule F, with Form 1040, or, if applicable,a Form 4835, pertaining to such property no further documentation is required.

If you do not file any of the above documents, you must provide documentation of bona fideagricultural use on the property. This would include receipts of farm products purchased or sold.

You may have a separate covenant for each legally definable tract of land you own. No one covenantcan cross county lines or state boundaries. Separate covenants can be held in separate Georgiacounties. Tract means a parcel of property with boundaries designated by the Board of Assessors tofacilitate proper identification of the property on their maps and records.

The Board will review the current use of the property. An appraiser from the Board of AssessorsOffice will perform an on-site inspection of the property and prepare a report for the Board ofAssessors.

You should submit any documentation you have regarding the bona fide current use of theproperty. Examples would be:

• Federal Income Tax Schedule “E” or “F”
• Timber Management Plans
• Receipts of sale of hay, livestock, produce, etc.
• Receipts for purchase of feed, fertilizers, seed, equipment, etc.
• Any documentation that will assist the Board in determining the qualifying use.

Yes, the law now states that if you enter into a second ten-year covenant, it is considered a renewalcovenant .

If you decide to sell your property or change the use during the 6th though the 10th year of your renewalcovenant , you only have to pay the taxes that would have been due if you were not in the covenant.There is no penalty amount, but you do have to pay taxes at the fair market basis for years you havebeen in the renewal covenant.

There is also a change that allows for an early out provision, if any one of the parties of the covenantturns 65 years of age during a renewal covenant.

If your application is turned down, you may appeal the decision of the Board of Assessors. This mustbe done, in writing, within 45 days of the date of the letter of notification. If you supply additionaldocumentation as proof of qualification, the Board will review your documents. If upon further reviewyour application is still denied, your appeal will be forwarded to the Board of Equalization for ahearing.

You are bound by legal agreement with Muscogee County for the duration of the 10-year covenant tomaintain the Current Use. There are four conditions under which you can end a covenant withno penalty, or a one-year penalty. These are:

If you or any party to the covenant dies during the period of the covenant, the covenant ends. This isconsidered a no penalty breach.

If any part of your property is taken, or is conveyed, to a party with the power of eminent domain, thecovenant may end. If this occurs, this is a no penalty

If you become medically unable to continue the land in its qualifying use, the covenant ends. TheBoard of Assessors requires letters from two (2) doctors stating the medical reason that a landownercannot continue to farm. If tax savings have been enjoyed during the year this occurs, then a one-yearpenalty is applied.

If your land is taken from you through foreclosure, the covenant ends. If tax savings have been enjoyedduring the year this occurs, then a one-year penalty is applied.

Otherwise to get out of the covenant early you must pay a tax penalty equal totwice the tax savings enjoyed to date, plus interest.

Breaching a Current Use covenant results in a penalty that applies to the entire tract that is placedunder an original covenant, even if the breach occurred on only a small portion of the tract undercovenant. The penalty paid by the original covenant holder will be an amount equal to twice theproperty tax savings incurred from the year the covenant was entered until it was breached, plusinterest.

In the event that a portion of the land under a Current Use covenant is sold to a qualifyinglandowner, who later breaks the covenant, penalties also apply to the entire tract under the originalcovenant. Under this condition, there will be a pro-rata assessment of the penalty against each of theparties of the covenant in proportion to the tax benefit enjoyed by each. This means that the originalcovenant holder will pay a fine based on the tax savings enjoyed on all of the acreage, from thebeginning of the covenant up to the time of sale of land, and of the breach. The subsequent covenantholder would pay a fine based on the tax benefits enjoyed from the time of covenant land purchase upto the time of the breach. Please be aware that the penalty plus interest constitutes a lien against theproperty.

Penalties for the Agricultural Preferential covenant are assessed as the tax benefits enjoyed duringonly the year of the breach, times a factor of:

• 5 if breached during the 1st or 2nd year
• 4 if breached during the 3rd or 4th year
• 3 if breached during the 5th or 6th year
• 2 if breached during the 7th, 8th, 9th or 10th year

The landowner in the original covenant pays the penalty.

The Board of Assessors office maintains the FMV of the property for each year of the covenant. Theyalso calculate the CUVA value for the property. The difference between the actual FMV and theCUVA value becomes an annual exemption for the taxpayer. The tax savings benefit is calculatedfrom the amount of the exemption.

The following is an example of how a penalty might be calculated if a covenant was breached in the6th year of the agreement, and the parcel is vacant with no homestead exemptions.

*Exempt amount is the difference between the FMV and the CUVA value multiplied times the assessmentlevel of 40 percent.
(195,000 - 92,000 = 103,000 X .40 = 41,200)

The penalty amount will vary from covenant to covenant due to the fact that the FMV and the CUVAvalue will be different for each parcel.

As shown above, the FMV changed between the second and third year. Thus the penalty amountincreased between the second and third year. This demonstrates the importance of keeping up withthe FMV, even though you are not being taxed on that amount.

In fact the tax amount due under Current Use for the first year would be $1,232.80. Without theCurrent Use covenant, the tax due would be $2,613.00. So as you can see this covenant can offersubstantial tax savings.

If the covenant is breached due to foreclosure or a medically demonstrated illness, and tax benefitshave been received for that year, then only the penalty amount due for the year in which you breach isdue. Under one of these circumstances, the penalty due would be $4,728.00.

Yes, you can change among good faith production of agriculture or forestry crops provided that younotify the Muscogee County Board of Assessors in writing of the intended use change. Failure tonotify constitutes a breach of the covenant with penalties as described.

Yes. But to avoid a penalty, the buyer must continue the terms of the original covenant and enter anew continuance Current Use covenant for the land purchased. The buyer must also be someonewho is eligible to enter into an original covenant. The sign-up period for the new owner is during thenext year’s regular sign-up period, January 1 through April 1. The landowner under the originalcovenant remains in that covenant, unless all land under covenant was sold. But the original covenantholder still remains legally responsible for any penalty assessed against benefits earned before the sale.

When selling land under covenant, it may be wise to have your attorney include language with theproperty deed requiring the new owner to continue land use under provisions of the original covenant.

Department of Revenue Regulations state that when there is a change in ownership of propertyreceiving current use assessment, the new owner must apply for a continuation of the covenant. Thisapplication must be made on or before the deadline for filing returns, which is April 1.

In the event of a divorce, the original parties to the covenant remain liable for any breach of thecovenant. Responsibility for penalties due to a covenant breach should be specified in divorce decrees,contracts, etc.

1. The part of the property so transferred (by plat and deed) is to be used for single-familyresidential purpose. Starting within one year of the start date for the building of the dwelling andcontinuing for the remainder of the covenant period, the residence is to be occupied within 24months from the date of the start by a person who is related within the fourth degree of civilreckoning to an owner subject to the covenant. (see attached addendum for description ofDegrees of Kinship)
2. The part of the property so transferred, taken together with any other part of the property sotransferred to the same relative during the covenant period, does not exceed a total of five acres;and in any such case the property so transferred shall not be eligible for a covenant for bona fide current use.

If the original covenant holder dies before the Current Use or Agricultural Preferential covenantexpires, the agreement is nullified, and the covenant ends without penalty, or the heirs have the optionto continue the covenant without penalty.

If the property owner ends the covenant because of a foreclosure or medically documented illness, thecovenant is breached. But only the tax savings incurred in that particular year will be forfeited.Under these circumstances, the property owner may not be eligible to immediately reapply.

There is no apparent time limit set by Georgia law on when you can change from an existingAgricultural Preferential Assessment covenant to a Current Use covenant. However, you canchange from Preferential Assessment to Current Use, for a particular covenant, only once.

You cannot change from an existing Current Use covenant to a new Agricultural PreferentialAssessment covenant except at the end of the Current Use agreement.

The Board of Assessors will send both the transferee and the transferor a notice of the Board’s intentto assess a penalty for the breach of the covenant. The notice shall be entitled Notice of Intent toAssess Penalty for Breach of a Current Use Covenant and shall set forth the followinginformation:

• The requirements of the new owner of a property currently under a “Covenant” to apply for acontinuation within 30 days of the date of postmark of the notice;
• The new owner of a property currently receiving current use assessment must continuously devotethe property to an applicable bona fide qualifying use for the duration of the covenant
• The change to the assessment if the covenant is breached, and
• The amount of the penalty if breached.

No. You must sign a release of the first 10-year covenant and the exemption ends, The Board ofAssessors office will send you notification that your covenant is about to expire.

You must make application for a new 10-year covenant, if you desire the exemption to continue.

If you apply for your second 10-year period, on the exact same tract, it is considered a RENEWALCOVENANT .

Not necessarily. Ten years is a long period, and many changes can occur.

Changes in ownership, changes in use and other factors may have occurred that need to be reviewed.

Also, since this type of covenant was originally placed into law in 1992, there have been changes madeto the law, as well as changes to state regulations. Other changes have occurred due to court casesthat clarify the law. These changes include making it more difficult for smaller tracts to enter intothese covenants, clarification of the type of income allowed (no, non-agricultural related rentalincome) and clarification of the definition of primary use of the property.

Current Use values for land cannot change more than 3 percent per year or more than 34.39percent over the life of the covenant. Remember that your land will be taxed according to Fair Market Value at the end of the covenantunless you renew the covenant.

When a public body (government) acquires the land through eminent domain, the covenant ends. Youmay be entitled to sign up again, if you choose.

Property that is either given or sold to schools and power companies would also include in this group.

The best approach would be to enroll only the land that you intend to keep in the qualifying uses forthe life of the covenant. This means to create a new legal description for separate tracts.

For example, if you own 100 acres and feel you may want to develop or sell a portion during the 10year covenant period, you will be required to submit a legal description to the Board of any propertythat will not be included in the covenant. This legal description can be by deed or by survey.

When one-half or more of the area of a single tract of real property is used for a qualifying purpose,then such tract shall be considered as used for such qualifying purpose unless some other type ofbusiness is being operated on the unused portion; provided, however, that such unused portion mustbe minimally managed so that it does not contribute significantly to erosion or other environmental orconservation problems. The lease of hunting rights or the use of the property for hunting purposesshall not constitute another type of business. The charging of admission for use of the property forfishing purposes shall not constitute another type of business.

For Agricultural Preferential and Current Use, Georgia law now states:
Such propertyexcludes the entire value of any residence and its underlying property; as used in this subparagraph,the term "underlying property" means the minimum lot size required for residential construction bylocal zoning ordinances or two acres, whichever is less. This provision for excluding the underlyingproperty of a residence from eligibility in the current use covenant shall only apply to propertythat is first made subject to a covenant or is subject to the renewal of a previous covenant on or afterMay 1, 2012.

Covenants entered into before May 1, 2012 are not subject to this portion of the law, unless theytransfer ownership, and are required to file for a continuance application. It also applies if you acquirenew acreage and request it to be added to an existing covenant.

In Muscogee County, the minimum lot size required for residential construction is TWO acres. If youhave more than one residence on the property, two acres must be cut out for each residence/mobilehome.

Leasing a portion of the property subject to the covenant, but in no event more than six acres of everyunit of 2,000 acres, for the purpose of placing thereon a cellular telephone transmission tower. Anysuch portion of such property shall cease to be subject to the covenant as of the date of execution ofsuch lease and shall be subject to ad valorem taxation at fair market value.

Caution should be taken if you are considering leasing for any purpose other than cell towers, huntingor agricultural purposes.

Yes. If your tract is 10.75 acres, with a residence, you must cut the house and two acres out.Your application for current use would be based on 8.75 acres and subject to the requirementsfor tracts 10 acres and less.

If you have a tract of 12 acres or less with a residence, you must cut the house out plus 2 acres andwould be subject to the same requirement.

No. Leasing is permitted if the lessee meets the qualification under O.C.G.A. § 48-5-7.4 (a)(1)(C) andthe use remains the same as the original covenant. Owner must notify the Muscogee County Board ofBoard of Assessors if there are any changes to the original covenant to determine if a breach hasoccurred.

If a qualified owner has entered into an original bona fide current use covenant and subsequentlyacquires additional qualified property contiguous to the property in the original covenant, the qualifiedowner may elect to enter the subsequently acquired qualified property into the original covenant forthe remainder of the ten-year period of the original covenant; provided, however, that suchsubsequently acquired qualified property shall be less than 50 acres.

"Contiguous" means real property within a county that abuts, joins, or touches and has the sameundivided common ownership. If an applicant's tract is divided by a county boundary, public roadway,public easement, public right of way, natural boundary, land lot line, or railroad track, then theapplicant has, at the time of the initial application, a one-time election to declare the tract as contiguousirrespective of a county boundary, public roadway, public easement, public right of way, naturalboundary, land lot line, or railroad track.

If this occurs, you would be subject to the changes in the law that require any residence and two acres(if applicable) to be delineated out at the time you opt to combine properties.

Current Use land value is based on its use, location and soil productivity. Annually the GeorgiaDepartment of Revenue publishes a table of values for all Current Use land in Georgia. Thetable of values is available at the Muscogee County Board of Assessors Office, University of GeorgiaCooperative Extension Service County Office, the Georgia Forestry Association, Georgia FarmBureau Federation and the Georgia Forestry Commission.

Once your application has been approved, the acreage of your parcel is broken down by soilclassification. Then the soil types are costed against the above table and totaled for a new Current Use value.

The Board of Assessors Office will continue to notify the taxpayer of any changes to the FMV of thecovenanted property. Remember the difference between FMV and Current Use value is the basisfor calculating any penalty. So, pay careful attention each year to the FMV of your land, even whilein a protective covenant.

If you do not change the use of the property, each party may be eligible to file for continuance of theoriginal covenant. It would be wise to discuss this with the Board of Assessors office to make surethat the division will be done in a manner that would not breach the covenant.

The Board of Assessors should be consulted before building any improvements on propertydivided for estate planning purposes.

If property is placed in any of the above, there are specific requirements under the law. The partnershipor family farm corporation MUST derive 80% of its income from bona fide agricultural productionpurposes within this state. It may NOT receive more than 20% of its income from other non-relatedagricultural purposes, such as dividends on stocks and bonds other non-agricultural investments, rentalincome, etc. The property tax along with any maintenance fees are expenses to the property in whichincome derived from the property is used to pay such expenses and such income must be at least 80%from bona fide agricultural use.

All parties of the partnership or corporation must be related to each other within the fourth degree ofcivil reckoning (see addendum containing Degrees of Kinship), except that there is an allowance fora non-related 5% ownership for management purposes.

The Muscogee County Board of Assessors will require the following along with your application underthese circumstances:

• Copy of your certificate of corporation filed with the Secretary of State
• Copy of the income tax return for the partnership or corporation, and
• An affidavit that the parties are related to each other in accordance with the law