Indiana law allows a property owner to classify his or her property as (1) a forest plantation, (2) a wildland, or (3) a native forest land if the property contains at least ten (10) contiguous acres and meets the statutory criteria and the approval of the state forester. The criteria for determining if land qualifies as either of the three classifications is set out by statute. In return for the classification and the property owner’s abidance by the state’s rules, the property is assessed for real estate taxation purposes at one dollar ($1) per acre.
A person who wishes to have a property classified as either a forest plantation, a wildland, or a native forest land must submit to the state forester an application with a survey of the proposed parcel. After approval of the application, the Department of Natural Resources will provide the property owner with signs indicating the property’s classification to be posted on the property.
There are a number of restrictions on the use of the classified lands. The property owner must abide by the state forester’s timber and wildlife management plan for the property. Classified lands cannot support any buildings or dwellings. The property cannot be used for grazing cattle or other animals. Except for crops cultivated solely for wildlife food or cover, the property owner may not cultivate nontimber agricultural crops on land classified as wildlands. Hunting and the leasing of the ground for hunting are generally permitted on the property. Harvesting of timber is permitted as long as it is in abidance with the timber management plan. Commercial harvesting requires notice to the state forester.
The property owner is obligated to file an annual report with the state forester concerning the property. Additionally, at least every five (5) years, the state forester must provide an inspection of the property.
Withdrawal of the classification of the property can come with a steep penalty. The property owner is stuck with a bill including:
- The total property taxes that, if it were not for the classification, would have been assessed on the land during the period of classification or the ten (10) year period immediately preceding the date on which the land is withdrawn from the classification, whichever is lesser.
- Interest on the property taxes at the rate of ten percent (10%) simple interest per year
- A penalty amount of one hundred dollars ($100) per withdrawal plus fifty dollars ($50) per acre, or an amount as established by rule by the natural resources commission.
The withdrawal penalties are made a lien against the property.
Classification requires a significant commitment from the landowner, and withdrawal can be especially burdensome. Nevertheless, the Indiana Classified Forest Program can be a worthwhile opportunity for many Indiana property owners. The program is especially advantageous for property owners with rural acreage that is not intended for development or agriculture in the near future. It allows the landowner to use the land for his or her recreation and enjoyment practically free of real estate taxes. It also allows the landowner to lease the property for hunting and fishing, thereby drawing income from tax-free property.
The Indiana website www.in.gov has additional information concerning the program, including frequently asked questions from the state forester.
Tags: Department of Natural Resources, forest plantation, real estate taxes, wildland