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Hi Folks,
We have a camp in Sherman. We are planning to purchase 15 acres that abutt our property. The RE Agent told us that this land was in Tree Growth Management. We have now been told that the plan has recently expired after 10 years and that we have one year to put it back into tree growth management or we can take it out of tree growth management.
This is all unfamiliar territory to us. We have been told that if we do not put it back into a TGMP that we would have to pay a penalty. Who determines that penalty and how long does the process take? Out of the 15 acres there is about 12 acres of woods and the rest is considered an agricultural field.
Any advice / direction would be greatly appreciated.
I don't believe there is a fine. I do think there is a tax break for land in tree growth though. There is a fee to remove land from tree growth if the time hasn't expired. I would think that if you contact Maine Forest Service, they could probably help you out. Hope that helps.... Good luck.
If it has expired, it is NOT in tree growth. Do not buy this land until the seller has renewed the tree growth plan or paid the penalty for removing it from the tree growth program. If you buy it YOU will be responsible for either entering it into the tree growth plan or paying the penalty. The penalty can be as much as 30% of the town's valuation of the land.
Every town is different. Some towns are very lenient and informally grant a "grace period" to renew. This is illegal, but it happens in some towns. Most towns eagerly wait for people to neglect renewing their plans by the anniversary date. The town assesses the penalty and rejoices in the extra money.
How bad can this be? Say a guy has 40 acres on a lake. In tree growth it's assessed at about $100 an acre. If not in tree growth it would be assessed at $240,000. If the owner slips up and misses his tree growth renewal date the town could send him a bill for $72,000. That's a whole lot more than the $350 or so that the forester would charge for renewing the plan.
Anybody buying land in tree growth should not only check whether it is in tree growth, but should also check the expiration date of the existing plan. It just might expire some 17 days after your purchase. That might not be enough time to get a licensed forester to prepare a new plan. Most of the time when you buy land in the tree growth program you have a year to decide whether you want to continue in the existing program or withdraw it. State government figures that in a year you can learn what you need to know to make the decision. Just make darn sure the plan does not expire during that year or you could get a big surprise.
There are a lot of superstitions about Maine's tree growth program. Got any questions? Ask away.
Last edited by Northern Maine Land Man; 10-02-2009 at 07:19 AM..
Tree growth is for 10 years and must be renewed every 10 years. The land owner must arrange with a Forester to map out the woodlot and to form a 'plan'. The fee for this is usually very low and only takes one day to complete.
Plus every time that the deed changes hands it must be renewed again.
When FBK bought land in Treegrowth from a forester, he had 1 year from the date of the purchase to renew it's treegrowth status.
He later took 1 acre out from treegrowth status. The penalty that he paid was equal to the purchase price of that acre, and his penalty was equal to the annual property tax on that acre.
If this is confusing, allow me to explain. He bought Treegrowth land for $900/acre and his taxes were about $1.05/acre. Then he took 1 acre out of Treegrowth, the penalty was ~$900, and his annual taxes for that 1 acre are now ~$900.
When land is in Treegrowth status, it does limit what you can do with that land. In FBK's example he can grow trees for firewood, or for timber, or for tipping, or for maple syrup production, or Christmas trees, or for wildlife habitat, or fruit orchards. Beneath the forest canopy he can still set bee hives, and chicken coops, and herd sheep / goats, and he can grow ginseng and mushrooms.
So in his case; he is happy to function within the 'limit's that Treegrowth impose upon him.
Thank you everyone for your responses. I am currently awaiting paperwork from the Realtor and also I am waiting to get in touch with our attorney. We will not sign anything until we have a clear understanding of the situation. I am sure I will be back with questions once I have more information.
As always I appreciate the help from the people on the forum, anytime I have posted the responses have been polite and helpful.
If you buy a piece of land in tree growth with say, eight years left on the plan, all you have to do is state within one year whether you intend to keep your land in the tree growth program and stay with the existing plan or remove the land from the tree growth program. You don't need to spend money on a new plan unless your intended plan is very different from the existing plan.
NMLM
It is my understanding that the current management plan has expired.
I think our preference would be to take it out of Tree Growth, it is not a huge piece of land and although a tax break is always nice it would be nice not to have to worry about management plans.
I guess we just have to find out the logistics of the transaction, what has to be done before the land is purchased or if the current owner has to pay the penalty since the plan has expired or if we have to pay it since it will be our decision to keep it out!!
It should be paid by the owner who took it out of tree growth. If that becomes a big stumbling block it will be up to you whether to buy it and pay the fee.
The fee is determined by several factors;
1. how long it has been in tree growth.
2. The tax rate for each year since 1973.
3. the valuation of the land each year since 1973 compared to the tree growth value each year.
4. The present value if not in tree growth.
As I said above, the worst case scenario would be for the town to take 30% of the present value.
Think when it is time for me to buy some land, will definitely get a realtor to help me. There are so many land issues that I am not familiar with and it could be ugly if I bought land with restirctions on it that I didn't know about, no matter how sweet the deal might seem.
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