Farm-use taxes and selling your land

Much of the farmland and timberland in the Carolinas is taxed at a lower rate because it is in active farm or forest use. When that land is sold for development, the tax break ends, and some of the past savings can come due.

North Carolina

Land in the present-use value program is taxed on its farm or forest value. When the land stops qualifying, the deferred taxes for the current year and the three years before it become due, with interest.

South Carolina

Land with an agricultural use assessment is taxed at a lower rate. When the use changes, rollback taxes can be charged for the current year and up to five years before.

Who pays

That is part of the deal. In many land contracts the buyer agrees to pay the deferred or rollback taxes, because the buyer is the one changing the use. Ask about it up front, and talk with your accountant about your own situation.