Buying land or a home on acreage that's in current use

What is current use in New Hampshire?

Current use assessment (RSA 79-A) taxes qualifying open land, such as farm land, forest land and unproductive land, at the value of its present use instead of its value for development. That usually means a much lower tax on that land. According to UNH Cooperative Extension, a parcel generally needs at least 10 acres to qualify, with exceptions for farm land that produces at least $2,500 a year in agricultural products and for wetlands.

What is the land use change tax?

When land comes out of current use because its use changes to one that doesn't qualify, such as building a house, a driveway or a new lot on it, the town assesses a land use change tax of 10% of the full and true value of the land whose use changed, measured at the time of the change (RSA 79-A:7). It's a one-time tax, and it's in addition to the regular yearly property tax.

The tax is due when the use changes, and it's owed by the owner at that time.

Does selling the land trigger the tax?

Not by itself. UNH Cooperative Extension explains that owners can sell or subdivide current use land without a penalty as long as the parcels still meet the program's rules, and that the current use status stays with the land whoever owns it. So if you buy land in current use and later build on part of it, the change tax can fall to you.

What should I ask before buying land or acreage?

• Is any part of the parcel in current use? The town's assessing office can tell you.
• Which part is the house lot or building area, and which acres stay in current use?
• Are you planning anything, such as a new house, a barn, an ADU or a second lot, that would change the use of land in the program?
• If a change in use happens before or at closing, who pays the change tax? Settle it in the purchase agreement.

Ask the town assessor or a real estate attorney about a specific parcel.

How does current use fit my loan?

Your monthly escrow covers the regular property tax bill. It doesn't cover a land use change tax, so plan for that separately if you'll build. Homes on larger parcels can also raise appraisal and loan program questions, so tell Tom about the acreage early. The property tax guide explains how the yearly bill works, and the well and septic guide covers the checks most rural homes need.