Use Value Appraisal and Current Use Taxation

When Vermont was primarily an agricultural state, farmland and farm buildings were reliable indicators of wealth because most people made their livings directly from the land. Taxing a farm at “fair market value” or “ad valorem” (at value) meant taxing the farm based on its size, soil quality, proximity to markets and therefore the ability of the particular farm to produce income. 

Taxing farm and forest land based upon the real value of the land in the marketplace once, meant taxing it at the fair value at its current use, effectively operating as a “current use” tax system. At the time, this was a fair system that taxed land based on productive capacity, raising necessary revenue without creating undue burden. 

However, while agriculture and forestry remain important sectors of the Vermont economy, they no longer dominate the economy as they once did. Today, most Vermonters work outside these sectors, and the land is valued based on real estate value rather than its value as agricultural or forest land. As a result, our property tax system remains an ad valorem or fair market value system, but it’s no longer a current use tax system.

Ad valorem tax systems tend to apply tax pressure on under-developed real estate, such as farm or forest land, encouraging owners to move land to the so called “highest and best use,”—its highest potential state of development of the land. In contrast, current use tax systems value land at its current use, taxing land based on its productive capacity rather than its potential development value.

The Vermont Legislature has recognized the undue development pressure placed on farm and forest land by the ad valorem property tax system and instituted the Use Value Appraisal (UVA) program as a current use option. 

Enrollment in the UVA program results in property taxes compatible with the productive capacity of the land. There is widespread agreement the program has been widely successful and helped maintain Vermont’s tradition of a working landscape. Surveys and forums by the Council on the Future of Vermont reveal the state's working landscape of forests and farms is highly valued by the public. 

Vermont Woodlands Association (VWA) Policy: 

The Vermont Woodlands Association recognizes that the Use Value Appraisal program, and current use taxation, is critically important to landowners who practice forestry or agriculture in Vermont and strongly supports continuation of the program. 

Maintenance of a productive landscape with working farms and healthy forests not only provides 

• Jobs in our local communities for those who grow, harvest, transport and process the products we produce from the land

• Substantial benefits to the public in the form of the wholesome locally-grown food, high-quality sustainably produced forest products, clean air, clean water, carbon storage, wildlife habitat, and recreational opportunities that define the Green Mountain State. 

VWA pledges to continue to work constructively with Vermont landowners, our Legislature and our conservation partners to support and make improvements to the Use Value Appraisal program, while resolutely defending fair taxation for forest and farmland and the maintenance of healthy forests and farms in a productive, working landscape. 

Policy Approval: 

Vermont Woodlands Association is a nonprofit (501(c)(3)) association dedicated to the health and enhancement of the working forest in Vermont. Through education, outreach, and advocacy we are a Voice for Healthy Forests in the Green Mountain State. 

This policy document was approved by the VWA Board of Directors on 14 February 2019.

Learn More

For a more detailed look at the full Use Value Appraisal and Current Use Taxation policy, you can download the complete PDF version here.