Timberland

Maine Current Use Tax Programs

Maine has four current use programs to reduce taxes on land that is used primarily for a specific purpose. The four programs are tree growth, open space, farmland, and working waterfront. The following is a brief explanation of each program with links to guide you to more detailed information.


Tree Growth Tax Law 
The most commonly used current use tax program in Maine is the Tree Growth tax program. It may also be one of the most misunderstood. The basis of the program is to assess land of 10 or more acres based on its productive use as commercial timberland. Growing and harvesting must be the primary use.
During 2017, Maine’s Tree Growth tax program came under the scrutiny of the governor’s office as did most 
property tax reductions. It is believed, and probably rightly so, that a significant percentage of the properties enrolled in this program may not be in compliance with the law. In order to be in compliance, your forest management plan needs to be up to date and implemented. If you have purchased forestland in Maine and you have never talked with a licensed forester you may already be out of compliance. Bulletin 19 on the state website provides information for those already in the program and those considering enrolling. The link below is bulletin 19 
Bulletin 19 

Farmland Tax Law
This tax law requires the land to be used for agricultural or horticultural purposes and must be of 5 or more contiguous acres. The land must earn at least $2,000 gross income per year to 
qualify. The owner must file an income statement with the assessor by April 1 of each fifth year, after qualification, for the previous 5 years income of the owner or lessee.
The assessor can use a number of factors to determine farmland values for current use 
including farmer to farmer sales, soil types, land rents, and others. For additional information on this tax law see Bulletin 20 link

Bulletin 20                                                        

Open Space Tax Law
This program provides for a reduced assessed value based on the property being preserved or 
restricted for a public benefit. Qualifying public benefits include recreation, scenic resources, game management and wildlife habitat. The open space program does not have a minimum 
acreage requirement. In open space the tax assessor will reduce the value by either researching sale data of parcels all or partially in conservation or preservation and computing a fair value, or by applying a percentage reduction based on the public benefit or benefits being applied. The reduction, depending on the benefit, can be as high as 95% of the assessed value. See Bulletin 21 at this link. 

Bulletin 21

Working Waterfront
Land that qualifies for this current use tax treatment is for land on tidal waters or in the 
intertidal zone used at least 50% for access or support of commercial fishing activities.
The assessed value reduction varies from 10%, 20% or 30% depending on the percentage of use and potential deed restrictions for use. See all the details on the state site for Working Waterfront Q&A at: https://www.maine.gov/revenue/forms/property/pubs/workingwaterq&a.htm

Moving Sideways 
If you desire to change the use of your property under any of the first three laws above you can avoid any penalty for that change of use. Property changed from farmland to open space, farmland to tree growth, open space to farmland, or open space to tree growth will not be 
penalized if a parcel also meets eligibility requirements of the new classification. 
 

         

Maine Forest Service Assistance Programs

I just attended an educational class on forestry issues taught by State Foresters Terri Coolong and Oliver Markewicz. This informative session covered topics of the Maine Tree Growth Tax Program, Maine Forest Practices Act including liquidation harvest laws, foreign investment in agriculture land rules and other information.

I believe it is a little known fact that the Maine Forest Service can provide free technical information to those who own forestland in Maine or those considering purchasing it. Maine has 10 district foresters who cover our state offering services ranging from educational programs to limited one on one contact with individual owners.

The district forester will help you understand sound forestry practices that when implemented should add long term value to your land investment. A one on one session can give you a better understanding of your land and should help you be more informed when working with an independent forester to formulate a forest management plan. To find the district forester who covers the town your property is located check out the link here to The Maine Forest Service.

Comments

  1. Peter McPhail on

    Our district foresters are a great resource for anyone who is looking to buy land in Maine and is new to owning Maine land!!
    • Mike on

      Great information for timberland owners in Maine. Thanks
      • Amanda on

        Great article & tips!

        How To Choose A Logger

        Is it time to harvest your timberland in Maine? If so and you do not have the experience, equipment or desire to do it yourself, do you know how to find someone to do the harvesting for you?

        Choosing a logger is a very important process in the management of your timber investment. Done properly, harvesting will pay a return on investment with competitive stumpage checks, improve the growth of the remaining trees, protect sensitive areas, provide habitat for game animals, open views and possibly make road improvements. An improper harvest may do just the opposite of the above. So how do you go about finding a logger you ask?

        If you have a forest management plan you should start with your Maine professional forester who prepared your plan. He or she should know some reputable loggers who they could refer to you. Once you have a couple of names ask some questions.

        • Ask for references from other land owners that the logger has worked for. Call them and ask how the job turned out.
        • Ask for their certifications. The better loggers in Maine will have been through the Certified Logging Program (CLP) or the Master Logger Certification (MLC). Both of these credentials show that they have some working knowledge of proper forestry and safety techniques.
        • Ask them to show you that they are insured for workers compensation in case of an accident. You do not want an injury on your land to become your problem.
        • If you can, visit a couple of their past jobs sites to see how they left the land.
        • Once you have decided on a contractor get a signed contract for the job. This will give you and your logger have a clear understanding of how the job will be done and what and when you will be paid for your trees.

        If you get an unsolicited offer in the mail or over the phone be cautious. That logger may or may not be good at what they do, to be sure use the above questions.

        As always I would recommend that your independent forester be part of the process. Their assistance in the process will most likely pay dividends for the future of your forest.

        For more information on timberland see http://investintimberland.com/

         

        Maine Deer Hunting Food Plots and Stand Placement

        We had a successful hunting season in Maine for 2015.  Everyone in our hunting party saw deer, had some good naps on stand and just enjoyed being in the Maine woods in Hancock County.  In the post you will see a photo of my 10 year old nephew, Gavin, enjoying a nap on stand. Gavin bagged his first turkey in May and bear in October, but the whitetails were intolerant of the snoring sounds coming from his blind.

         

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        Snoozing in the blind

         

        Throughout this year we worked on clearing new hiking and ATV trails throughout the northwest section of our family woodlot.  Along these trails we installed two ladder stands on a ridge of mature maple and pine trees overlooking one of the small babbling brooks that meanders through our land.  From our stands we also have a view of Blue Hill Maine and Mount Desert Island and parts of Acadia National Park. Even on the days we don't see deer the views are nice.

        The trail work paid off as my brother harvested a nice 8 point buck that dressed out just under 190 pounds.  To make the job of getting the deer out of the woods, our neighbor Nick and his 3 year old son Colby drove their ATV out our new trail and drug the deer out for us and even hoisted the animal onto our truck.  Thank you Nick!

        We have found the deer like to use our new trails along with other game animals.  To smooth out some of these trails and remove stumps we plan to have Jeremy Guellette of Ground Perfection Specialists spend a day or two with his grinder cleaning things up for us.  The machines you see clearing the sides of I-95 north of Lincoln is Jeremy's company.

        Once cleaned up we will seed down the trails and plant some small food plots.  Our forester also recommended cutting back the 7-10' poplar in areas.  This will cause the poplar to reshoot new seedlings and will be a "natural" food plot.

        We enjoy working and improving our woodlot.   Owning land in Maine has many benefits but to me one of the tops is the therapy of doing physical labor and discovering new areas of your Maine land and how to best take advantage of the topography and other features.

        Buying Maine Land With A Self-Directed IRA

        If you are like many of our customers concerned with having all of their retirement investments tied to the stock market you may want to look into a self-directed IRA. With a self-directed IRA you will be ready to act when you find that Maine land for sale that you know is a good investment.

        What is a self-directed IRA?

        The Individual Retirement Account or IRA has been around for many years as an incentive for individuals to save money tax deferred for their retirement. A self-directed IRA is simply an IRA that gives you complete control over what you invest in.

        What can you invest in?

        Unlike most IRA's offered by banks or custodians the self-directed IRA can be used for nontraditional IRA investments like real estate, notes, precious metals and many others. Maine timberland, farmland, land with development potential, waterfront and more could be a great diversification to you investment portfolio.

        Pros

        The best benefit of the SDIRA is the ability to have control over what you invest in. No one cares more about your retirement than you do. You can invest in what you know instead of letting others have control of your future. You can partner with friends and others on new investment opportunities. Your investments will grow tax deferred.

        Cons

        All investments have risk and a self-directed IRA will require you to do your own due diligence to mitigate risk.

        Because this type of tax deferred account could have a lot of potential tax advantages for you the IRS has a lot of rules that need to be followed.

        Is it right for you?

        You will need to decide if the ability to control your own destiny is something you are comfortable doing. If you do not have time for researching your own investments you may want to stick with a traditional IRA. If you are one of a growing number of individuals concerned with the course of traditional banking and investing, the self-directed IRA is worth a look.

         

        SOLD Maine Land Cabins Lake and Stream For Sale

         

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        Maine cabin in the woods

         

         

        The Nowland Brook Forest provides an exceptional opportunity to purchase a family recreational retreat property. The parcel consists of 349+- acres of heavily wooded land with nearly 2 miles of interior gravel roads. There are numerous paths and trails to hardwood ridges, beaver ponds, woodland meadows, and dark spruce forests. The varied terrain and privacy of the acreage make this property exceptional as a hunting retreat. Moose, black bear, whitetail deer and plentiful grouse call this place home. You can also find marten, fisher and bobcat hunting the forest edges in search of plentiful snowshoe hares.

         

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        Lakefront for sale Maine

         

         

        The improvements to the property are numerous. There are 5 hand scribed log buildings that make up the heart of the retreat. The main camp has a bedroom, dining area and kitchen within its 500 square feet of log construction. This cabin was built around 1936 and formed the base for what now is a 5 cabin compound. The other cabins are named Wildcat, Spikehorn, Big Bear, and Pine Marten. Each of the cabins is a hand scribed log structure that was built in the 1930s from logs harvested on site. Each cabin has a woodstove for heat during the cooler seasons, as well as beds for sleeping. Wildcat, Spikehorn and Pine Marten are each approximately 150+- sq ft in size. Big Bear is 252 +- sq ft of log construction.

         

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        Maine Cabin with Fireplace

         

         

        There is a tool shed near the cabins that is 96+- sq ft as well as a wood shed and two log constructed outhouses. A few hundred feet from the cabins a 480+- sq ft barn, with a concrete floor and second story storage is there to provide a place to house your atvs, canoes and other recreational tools. The soils near the barn have been used for gardening and are still open and tillable.

         

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        Barn and Garage

         

         

        There is a drilled well located about 100 feet uphill from the cabins and it provides drinking water to the main cabin via gravity feed. There is a hand dug well that has cool spring water available to use as well. Lighting in the cabins is produced by gas lights using propane that is delivered to the site by Dead River Company located in Ashland, ME. For more details call Rick Theriault at 207-731-9902.

         

         

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        Maine Log Cabin

         

         

        Recreational Land Investment For Sale Somerset County

        This newly listed forested lot for sale in Concord Township, Somerset County has all of the components for quality recreation and investment. When buying land many of our customers have a list of similar requirements. Here is a list of the most commonly requested features which this lot enjoys.

        1. Good Access - A parcel of land that you cannot legally get to has reduced value. The savvy buyer will be sure the acreage they are looking for has a good deeded right of way or fronts on a maintained public road. Care should be taken to certify an apparent access is a legal one.
        2. Power - Some customers will consider off grid locations, but the majority of people like the convenience of being on the grid because it is simply cheaper and easier.

           

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          136 +/- acres Concord Twp - Little Houston Brook Road frontage with electric at street.

           

        3. Dry Land - Maine buyers know that finding a large parcel of property that is completely free of wetland is probably impossible with all the streams, ponds, vernal pools and forested wetlands in our state. They look for a good percentage of dry land with soils that promote the growing of trees and other plants. The dryer the land the more options for building sites and future development there will be.
        4. Water Frontage - Almost every potential buyer either wants to be on or near some kind of water. Man is naturally drawn to wild rivers, streams, lakes and ponds for the recreation, views and resources.

           

          Frontage on Houston Brook in Winter 2015

          Lots of Frontage on Houston Brook

           

          Interior Roads - On larger tracts of land having a road or trail system is a great advantage to better use the land. The best parcels have a road through the property that makes available different building sites and a reduced cost for managing the timber on the property.

        5. Views - It is difficult to put a value on great views, but most customers hope to find them on the parcel they purchase.

           

          Nearby Kennebec River in Bingham Maine

          Nearby Kennebec River in Bingham Maine

           

        6. Nearby Recreation - When buying a property location is a big consideration. For those investing in land for recreation, things like maintained trails for snowmobile, ATV riding and hiking are a big benefit. Nearby waterways for fishing and boating appeal to the outdoor minded buyer. Another important  consideration is the culture in the area. Do the local residents also appreciate the natural environment and are there nearby businesses and services catering to the rec buyer.

           

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          Nearby Groomed and Maintained Snowmobile Trails

           

        7. Timber - Not all buyers are focused on commercial timber value, but few desire to own a recent clear cut. As an investment, timber has always been a pretty safe bet for the long run. Healthy stands of trees of various ages, quality soils for better growth and the proximity of nearby markets for the harvested timber all will be considered by the educated investor.

        If you are reading this and are like many of our other customers looking for the features listed above, this new listing in Concord Township has all of these features. It contains 136 +/- acres of wooded land with frontage on a 4 season road, electric at the street, frontage on a mountain trout stream, some quality trees, interior road and just minutes from the Kennebec River and other recreation. See more details at our LISTINGS or call or email for a complete property information package.

        New App for Woodland Owners

        At the annual meeting of SWOAM a discussion came up about a new app for smartphones called About My Woods.  I down loaded it immediately and have used it for the past few weeks. It has some great features.

        The mapping menu is cool. You will find terrain, satellite, soil, water shed and land cover mapping all showing your location on the earth.

        The app has a decent description of plants, trees, wildlife and invasive plants and insects. I like the quality photos and description making identification much easier.

        A "who can help" menu has contact information for district foresters, local mills and more.

        The app is from the North East State Foresters Association (NEFA) and the best part is it is free.

        To get the app go to http://www.aboutmywoods.org/

        Coastal Timberland Investment Near Belfast Maine

         

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        Downtown Belfast, Maine

         

        Anyone looking for a reasonable investment in coastal Maine land should consider the Belfast area a great place to start. You can find land here for timber/recreation as well as development use. Prices will vary greatly depending on the size of the parcel, its proximity to the shore and many other factors.

        One of the big attractions to many of the small Waldo County towns is the close proximity to the Coast and Penobscot Bay. Belfast is one of my favorite small cities in Maine. It is not as well known as Bar Harbor and Rockland but that is not a bad thing.

         

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        Boardwalk Along Belfast Bay

         

        Belfast has a great downtown area with small specialty shops. One of my favorite don't miss spots is Rollie's Pub located at 37 Main Street. The atmosphere is energetic with staff and locals who are Maine friendly. After a meal at Rollie's a short walk down to the town board walk along the bay will help burn off a few French fries. The boardwalk and public park area on Belfast Bay is a great chance to see some impressive yachts in harbor.

         

        Swanville 103 +/- Acres

        Swanville 103 +/- Acres

         

        Peter and I listed a gorgeous 100+ acre woodlot in Swanville this week. The weather was beautiful for a snowshoe but the snow conditions were not. Anyone who snowshoes knows how much fun three feet of fresh powder can be. A little sun, wind and warmer temps should improve the conditions for this winter activity. This property located on Oak Hill Road has some nice timber, a long access driveway and a partly constructed home/cabin in need of some TLC and good carpenter skills. There is an existing well, septic and concrete pad for a garage. Power has been run onto the property. It is just 5 miles from the property to downtown Belfast!

        If you own a home in town and have been looking for a place to hunt, hike, cut firewood or invest, you should look into this new listing. Call us to if you want to see this property this winter. If you need more information click the link here for more details.

        Property Information Package - Oak Hill Road Swanville, Maine

         

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        Unfinished building near end of driveway

         

         

         

        Wood Supply and Diversifying your Woodlot

        At first glance forest products markets look a little glum in Maine. A lot of the airtime on the news is directed at mill closures and declining markets. What the news doesn't always tell you are the new opportunities and investments that are being made in some of the more successful mills and other global marketing opportunities that are opening up. Regardless of the market conditions, it is always a good idea to keep different eggs in different baskets and not rely solely on a few markets. This also works for the species and quality of trees you maintain on our woodlot. Managing your woodlot is much like managing your investment portfolio. The more you diversify your investments the less risk you assume. Trees of various species and conditions (mostly better quality) will give you more options in the future to take advantage of markets and capitalize on your investment. Not only does diversity in the structure and species of your woodlot improve your ability to take advantage of a variety of markets, but it also benefits other management goals such as creating habitat for a broader range of wildlife.

         

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        Maine Sustainable Forest Land

         

        Even aged management of your property (maintaining trees of mostly one age class) also decreases your diversity and lengthens the time between harvests and your income from those harvests. If you harvested the majority of your trees in one entry it could be 40-60 years before you could enter those stands again for treatment. Uneven or multi-aged management allows for 3 or more age classes to be grown at one time. With this management strategy a landowner could enter a woodlot every 15-20 years and take advantage of certain markets more often. Maintaining trees of varying sizes and ages allows you to selectively harvest ones that are mature while growing the next crop at the same time thus decreasing the time between entries. Of course not all woodlots are created equal and sometimes our options are limited. At times a mixture of both strategies should be applied depending on the conditions of a given stand of trees. Whichever strategy you choose for your property, take the time to decide what your long term goals are and plan carefully to maximize the full benefit of your property.