Chapter 61 is a voluntary
current use
Current use is a phrase used to describe the present condition of land use and the corresponding scheme for property tax incentives for qualifying land owners (typically rural) who wish to preserve open space and avoid having their property assess ...
program designed by the Massachusetts Legislature to tax
real property
In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, is land which is the property of some person and all structures (also called improvements or fixtures) integrated with or affixe ...
in the
at its timber resources value rather than its
highest and best use Highest and Best Use, or highest or best use (HBU), is a concept that originated with early economists such as Irving Fisher (1867-1947), who conceptualized the idea of maximum productivity. One of the earliest citations of the term is found in th ...
(development) value. Landowners who enroll their land in the program receive property tax reductions in exchange for a
lien
A lien ( or ) is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the ''lienee'' and the pers ...
on their property. The terms of the lien require that enrolled land remain in an undeveloped state and be managed for forest resources extraction under a forest management plan approved by the state. Furthermore, the lien provides the municipal government of the town in which the enrolled property is located a
right of first refusal
Right of first refusal (ROFR or RFR) is a contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transaction ...
should the landowner put the land up for sale while it is enrolled in the program. Towns may assign their right of first refusal to a state agency or a non-profit
land trust
Land trusts are nonprofit organizations which own and manage land, and sometimes waters. There are three common types of land trust, distinguished from one another by the ways in which they are legally structured and by the purposes for which th ...
. Landowners who develop their land while enrolled in the program, or for a period of time after withdrawing from the program, may be required to pay penalties.
Enrollment qualifications
In order the qualify for the Chapter 61 program, a parcel of real property must be at least contiguous in size and under the same ownership. Prior to approval, the landowner must establish a forest management plan for the affected property and have it approved by a state certified forester. Only the wooded and undeveloped portions of the land may be enrolled in the program.
Penalties
A landowner who has enrolled in the program is forced to pay a conveyance tax if he sells his enrolled land for a use other than forestry within a period of ten years after the last date forestry was practiced on the property or within 10 years after he first acquired the property. The conveyance tax is 10% of the value of the property minus 1% for each year since the property was last been used for forestry or was acquired.
Rollback taxes, the difference between the normal tax rate the preferential tax rate plus 5% annual interest, are charged whenever land is developed or is converted to another use not recognized by Massachusetts as forest, agricultural, or recreational in nature within five years of the last date of enrollment in the Chapter 61 program.
References
Massachusetts General Laws Chapter 61 Classification and Taxation of Forest Lands and Forest Products.
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