Maryland

Property Classification:

All property is generally divided into the following categories (MD Tax-Prop Code § 6-101):

(1) Government property;

(2) Leasehold interests;

(3) Operating property of railroads and public utilities;

(4) Stock in business of manufacturing or commercial business;

(5) Real property; and

(6) Tangible personal property.

Real property is divided into the following subclasses (MD Tax-Prop Code § 8-101):

(1) land that is actively devoted to farm or agricultural use;

(2) marshland;

(3) woodland;

(4) land owned by a country club;

(5) land used for a planned development;

(6) rezoned real property that is used for residential purposes;

(7) operating real property of a railroad;

(8) operating real property of a public utility;

(9) income producing real property;

(10) conservation property; and

(11) all other real property.

Agricultural Use (Forest Management Plan / Woodland Assessment):

Under certain circumstances woodlands are eligible to be assessed under a special agricultural use assessment. In general terms, there are two categories of woodland for assessment purposes: (1) woodland associated with a farm; (2) separate tracts of woodland. Different criteria apply to each category.

When the woodland is a part of a larger parcel that is determined to be actively used for agricultural purposes, the woodland portion will normally receive the special use assessment. In this case, it is generally expected that the primary use of the parcel is for an agricultural activity.

The agricultural use assessment is available for separate tracts of woodland if the property owner obtains a management plan for the woodland. The management plan must be prepared by a professional registered forester and the property owner will be required from time to time to demonstrate compliance with the terms of the plan. The management plan may be one provided by the State Department of Natural Resources pursuant to the "Forest Conservation Management Agreement" (FCMA) or to a forest stewardship plan recognized by the Department of Natural Resources, or to a plan from a private registered forester. The plan is not a legal agreement and does not require an entry fee.

Currently, land within a forest stewardship plan receives an agricultural land rate of $187.50 per acre. (Md. Code Regs. 18.02.03.08) The value is not frozen and can change.

Forest Conservation Management Agreement (FCMA):

The owner of at least five contiguous acres of land may make an agreement with the Department of Natural Resources to place the land in the Forest Conservation and Management Program (MD Tax-Prop Code § 8-211). The value of woodland in the program is frozen for the period covered by the agreement. Except for agreements made prior to July 1, 1984, an agreement must be for a period of at least 15 years

The Department of Natural Resources may set reasonable fees for the development of management plans, original agreements, and conducting inspections. The fees shall be designed to cover the administrative costs of conducting the program.

Forest land that is placed in the Forest Conservation and Management Program is assessed at $125 per acre regardless of its location in the state. That current use value of forest land in FCMA is frozen, by law, for the duration of the agreement (15 years). Charges for participating in a Forest Conservation and Management Agreement are as follows. A woodland owner shall pay an entry fee equal to .22 percent of the assessment of their woodland, but not less than $50.00. Additionally, an inspection fee will be charged every 5 years equal to 20% of the entry fee but not less than $100.00.

Woodland will be reassessed when:

(1) an agreement ends and is not renewed;

(2) timber is harvested, unless harvested according to the plan developed by the Department of Natural Resources;

(3) land subject to an agreement is conveyed to a new owner; or

(4) an agreement is ended by the Department of Natural Resources at the request of the owner or because the owner has not complied with the agreement.

Minimum Qualifications:

Any owner of 5 or more contiguous acres of forest land may enter the Forest Conservation and Management Program. House sites, crop land and other non-forest open space is not eligible. Open land that was recently planted to forest tree seedlings can be included. So can land that is used to grow Christmas trees if they will be cut at harvest. Living Christmas trees must not be dug taking the roots and the natural needle mulch with it. This destroys the soil holding benefits

Other Property:

Land subject to open space easements - Land subject to an easement by conveyance or assignment to the Nature Conservancy or to government for the preservation of its natural conditions is assessed on the basis of its value as open land. Thus, the value of the property will be adjusted to reflect the operation of the easement (MD Tax-Prop Code § 8-219).

Marshland - Effective July 1, 2005, marshland is valued at a rate established by regulation and less than the lowest agricultural land rate. (MD Tax-Prop Code § 8-210) Tidal marshland is valued at $30 per acre. (Reg. 18.02.08.01)

Conservation Property - Conservation property donated to the Maryland Environmental Trust is eligible for a property tax credit for 100% of all property tax due (MD Tax-Prop Code § 9-107). "Conservation property" is defined as land that is unimproved, not used for commercial purposes and subject to a perpetual conservation easement that is donated to the Department of Natural Resources or the Maryland Environmental Trust and accepted and approved by the Board of Public Works after June 30, 1986. The property tax credit is effective for 15 consecutive tax years, beginning July 1 following the donation of the easement.

• Kays, J., and V.M. Schultz. 2002. Tax and estate planning for Maryland forest landowners. Maryland Cooperative Extension, Keedysville, Maryland.

• Maryland Department of Natural Resources Forest Service. Forest Conservation and Management Means property tax savings. Annapolis, Maryland.

• Maryland Department of Assessments and Taxation. The agricultural use assessment. https://dat.maryland.gov/realproperty/Pages/The-Agricultural-Use-Assessment.aspx

• Calvert County Forestry Board. 2019. Tax incentive. https://www.calvertforestry.org/