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Property Tax Relief for Woodland Owners...

Property taxes pay for important local government services authorized by elected officials, but they are a significant annual cost for forest landowners. Landowners may not fully recover management investments, including property taxes, when trees grow 30 to 100 years before harvest and ownership changes about every 20 years. In addition, your land management provides wildlife habitat, watershed protection, aesthetics, and biodiversity that benefit many Minnesotans who pay no forest management costs. Because of the public benefits your forest land provides, the Minnesota Legislature created the Sustainable Forest Incentive Act (SFIA) and the 2c Managed Forest Land Classification (Class 2c) to reduce ownership costs on sustainably managed forest land. (Mel Baughman, University of Minnesota)

Key elements of SFIA and Class 2c:

SFIA

Class 2c

20 acre minimum

20 acre minimum

No maximum acreage enrolled

1,920 acre maximum enrolled

Public access required if > 1,920 acres enrolled

Public access not required

Exclude 3 acre minimum for building

Exclude 10 acre minimum for building

8 year minimum enrollment; 4 years to end agreement

1 year minimum enrollment

Pay usual property tax, class rate varies from 0.50% to 1.25% depending on class and property’s value. Get $7.00/acre/year minimum incentive payment ($8.61 actual payment in 2008)

Pay 0.65% Property Tax Class Rate

Property tax qualifies for itemized deduction on federal income tax return, but SFIA payment is taxable income

Property tax qualifies for itemized deduction on federal income tax return

For more information on tax relief options for woodland owners, please contact the Aitkin County SWCD.