You can lower your property taxes in Idaho by applying for the Forest Land Exemption. With this exemption you will reduce your property taxes every year and manage your timber to create a healthy and productive forest on your homestead.
We live in northern Idaho and have seen the benefits of applying for the Forest Land Exemption offered by Bonner County. Let’s talk about how to take advantage of this money-saving opportunity.
UNDERSTANDING THE FOREST LAND EXEMPTION
What is a forest land exemption and why do I need it?
From a land owner’s perspective, a forest land exemption saves us money by reducing our property taxes and gives us a plan to manage healthy and productive timber on our homestead.
From the county’s perspective, a forest land exemption gives incentive to land owners to manage timber, which enhances the beauty and health of the overall forest. Wildlife does not recognize land boundaries so sustaining a healthy habitat for them is important. Water flows across private lands and healthy timber helps keep the water clean.
Aesthetically, it is important to the county that the forest looks good to citizens and tourists alike. If the forested land is burnt or not cared for it lessens the appeal to stay.
The forest land exemption is really a win-win for both the county and the land owners like us. We are given lower property taxes as well as a plan on how to manage our timber and the county benefits from a beautiful, well cared for forest.
How much money can I save by applying for this exemption?
You can actually save quite a bit by applying for a forest land exemption. If you do not apply you will pay full taxes on the assessed market value of your property. Usually this is around 1%.
Example from our property
Assessed value without exemption: $125,313 x 1%= $1,253.13
Assessed value with exemption: $2,136 x 1%= $21.36
Total savings: $1,231.77
As you can see, we saved a lot of of money, $1,231.77!
When land is accepted into this program it is classified as timberland and is assessed at a lower value per acre than full market value rates.
How do I qualify for a Forest Land Exemption?
To qualify for the timber program, you must own a minimum of 5.0 contiguous acres fully stocked with trees. If you have a residence on the property you must have at least 6.0 acres. You must apply to your county’s Assessor’s Office and submit a written management plan which was created by
How many options are there in the Forest Land Exemption?
There are two forest land exemptions that you can choose from. If you own more than 5,000 acres, you are required to choose the Land Productivity Option. If you own 5.0-5,000 acres you can choose either the Land Productivity Option or the Bare Land and Yield Option.
- Land Productivity Option This is called the no strings attached option, but you pay a slightly higher value per acre than with the Bare Land and Yield Option. This is because the value per acre includes the value of the land, the potential tree growth per acre per year, and a 5-year average stumpage value. With this option you DO NOT pay taxes on the timber when it is harvested.
- Bare Land and Yield Option With this option there are strings attached because you will pay back taxes when the timber is harvested. Basically the taxes are deferred so that part of the income generated from the sale of the timber can help pay for the property taxes.
APPLICATION
How do I apply for the Forest Land Exemption?
Contact your county’s Assessor’s Office or download the application online. You must submit:
- One application form, called the “Owner’s Designation of Forest Land Option”, for each individually assessed parcel.
- Bonner County’s Forest Exemption Summary (see your county’s specific form)
- Forest Land Management Plan (see point below on hiring a forester)
Is there an application fee for the Forest Land Exemption?
There is no fee for submitting an application to the Assessor’s Office but you will have to hire a forester to create a management plan for you. See the point below about hiring a forester.
When is the deadline for the Forest Land Exemption?
The deadline to submit your exemption application and management plans is December 31st of the current year to qualify for the timber exemption program for the following year.
HIRING A FORESTER
How much does a forester cost and how can I hire one?
We obtained a list of approved foresters from the Assessor’s Office. They are all qualified and currently submitting management plans for customers. This is an important point. Be sure your forester is currently active and will submit his plan in a timely manner. Our Assessor’s Office told us that many people missed the deadline, thus missing the tax exemption because their forester did not create a management plan on time.
We found that there is not one fee that foresters charge. They ranged from $250-$400. When considering how much to charge, the forester will most likely take into account how much land you own as well as how far the site is from his or her own house. Our forester charged $250 to visit the site and prepare the plan, plus 50 cents a mile.
My personal suggestion is to “shop around”. Call several foresters on the list from the Assessor’s Office and explain your land to him or her. Ask him questions about what his plan will entail. See my suggestions in the point below. The forester we ended up choosing was a man whom I found very easy to speak with and seemed very knowledgeable. He was very patient in answering my questions and offered more explanation than asked.
When is the best time to hire a forester?
It is recommended to hire a forester when there is NO snow on the ground. It will cost you more money if your forester’s job is made harder because of how difficult it is to move around your property.
What questions should I ask the forester before hiring him?
Even if you know the answers to most of your questions, I feel it is a good idea to ask him anyway. By doing so, you will begin to get a feel for whether or not you can work with that sort of person. Here are some questions that I recommend you ask him:
- What does your management plan entail?
- What can you tell me about my trees?
- How much are your fees?
- Are you currently submitting management plans?
What does a management plan from a forester entail?
Your forester should prepare a plan which will include an area photo and topographical map of your land. It should also include a general description of the timber on your land. Species, age, and potential hazards such as insects, diseases and fire hazards. The plan should also include a plan on how to manage these potential hazards.
What can I expect during the inspection?
Your forester will meet you at your property on the scheduled date and time to look at your timber and begin his inspection. He will not only identify the species of trees and potential hazards such as insects, disease, and fire, but he will also educate you. Basically you can expect a course in Forestry 101 if you chose a helpful forester.
His goal is to equip you with the tools and knowledge you need to manage a healthy and productive forest. Ask as many questions as you want and be sure to tell him what your plans are for your land. Where do you want to build a structure? Are you planning on raising animals?
Do I need to be present when the forester evaluates my property?
No, it is not required that you be present when the forester evaluates your property but it is highly recommended. If you cannot be present you may choose to have a friend take your place. Double check that he is ok with you not being present or having a substitute take your place before hiring your forester. He should include reference materials in his management plan to help educate you on potential hazards. You will benefit from these materials if you weren’t there at the time of the inspection.
COMMON CONCERNS ABOUT FOREST LAND EXEMPTIONS
Do I have to pay the saved money back?
With the Land Productivity Option you do not pay deferred taxes. If you choose the Bare Land and Yield Option you will pay deferred taxes after the timber is harvested.
Can I still cut down trees for firewood if I choose to?
Yes, the timber is yours and you can use it for personal use.
Can I still mill some trees for building on my property?
Yes, you can cut down your own trees to build fences, and structures.
As the land owner what restrictions are there for using my trees while under the Forest Land Exemption? Are the trees owned by the government?
You own your timber even though you are choosing the forest land exemption. If you make changes to your land, such as building a home, you can amend your plan to keep the records updated.
Can I use the land under the Forest Land Exemption for my animals?
Yes, your animals can forage your land. If you choose to apply for a Grazing Exemption you need to make sure you are eligible for both exemptions and not in violation of either. Ask your Assessor’s Office for more details.
How long is one Forest Land Exemption application good for?
As long as there are no physical, ownership, or use changes to your land, you are only required to apply once. If you harvest your timber you need to update your plan. If there are any changes you are required by law to submit a new application and update your plan. Since 1982 you can change from one option to the other every 10 years.
How long do I have to implement the management plan laid out by the forester?
You have 5 years to implement the plan that was created by your forester.
I hope this article was helpful to you on your homestead. Don’t get bogged down in the details. If you are having difficulty finding the Forest Land Exemption application online, contact your county’s Assessor’s Office and I’m sure they will send it to you. Don’t forget to submit your application before December 31st to make sure you qualify for the exemption for next year’s property taxes! 🙂
