Conservation

CAUV farmland tax rate FAQs

You’ve got CAUV questions, we’ve got answers. When will I see a reduction in taxes? How much will my taxes go down? Will it affect land conservation? Ohio Farm Bureau has the answers to these questions and more in regard to CAUV (Current Agricultural Use Valuation)

 

What is CAUV?

Under Current Agricultural Use Valuation (CAUV) program, farmland is taxed at a rate that reflects its value for agricultural purposes instead of its value as development property. Learn more about the calculation here.
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What is CAUV Reform?

Important CAUV reforms that are included in the 2017 state budget bill ensure that all the various factors in the CAUV calculation tie directly to the agricultural economy, making for a more accurate CAUV valuation. Learn more about getting the most out of CAUV reform here.
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When did this law go into effect?

Sept. 30, 2017
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When will I see changes to my taxes because of CAUV?

It depends…
These changes are phased in over two reassessment cycles (6 years) and will begin with those 41 counties on reassessment in 2017. Each county will see the first half of these changes in their next reassessment, with the full implementation happening in their second reassessment.
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My taxes have increased 300% A 30% reduction doesn’t seem like very much. Why can’t it be more?

The CAUV values are based on a number of factors, including crop prices, production costs, cropping patterns and yields. Crop prices also played a big role in the increases in CAUV values. The calculation uses 7 years of crop price data, with the high and low prices dropped out, to provide a more even view of farm income. The high crop prices in the mid-2010s, which replaced very low crop prices in the early 2000s also played a big role in the increases in value.
Those increases were exacerbated by the flaws in the capitalization rate, which was creating a picture of a nearly risk-free farm economy because it did not use accurate farm data as its basis. By ensuring the capitalization rate is based on the actual farm economy from all aspects, along with the important data updates Ohio Farm Bureau lobbied for in 2015, Ohio’s CAUV calculation is even more closely tied to the farm economy.
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Does this affect what I pay toward school levies/millage?

Yes and no. On the whole, no, because there are important controls in place to ensure that levies passed by the voters will always collect the same amount of money. For example, if a levy collected $1 million in its first year on the tax rolls, it always collects $1 million after that. The millage rate is continually adjusted to ensure that same dollar amount is collected from the taxing district on the whole. This means that over the years, who is paying how much of that amount shifts between farm property and residential property. Therefore, the amount in total collected from the tax district on a school levy will remain the same.

On the individual level though, yes, this will affect what you pay towards school levies and millage, because your tax rate will now be based on a more accurate CAUV value. In addition, the unvoted 10 mills (1%) of every property tax bill do not change or adjust. So, if the value of a property goes down, that means less is collected on those first 10 mills.
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Do the changes affect land conservation?

Yes. The reform included a provision which requires that land used for year-round conservation or enrolled in a federal conservation program be valued at the lowest minimum value set by the Tax Department. This will remove the disincentive that has previously existed, where conservation land was valued at its productive value. While landowners will receive the lowered valuation once the practice is installed or the program enrolled, that practice must remain for three years. If the landowner removes the practice before the three year mark, they will have to pay back the difference between that lower minimum value and their actual CAUV soil value. The land would also return to typical CAUV valuation at that point.
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