Understanding Current Use in New Hampshire: A Guide for Landowners

What is Current Use?

Understanding "current use" can be crucial for our New Hampshire friends when dealing with undeveloped land. Current use is a tax assessment law that evaluates undeveloped land based on its "productive capacity" rather than its real estate value. This means that instead of using the typical assessed value of the property, the town determines the value based on its income-producing capacity as a forest, farmland, or other type of undeveloped land. When a property is assessed this way, it is said to be "in current use." This classification ultimately reduces taxes for landowners who use their properties for purposes like hunting, wildlife preservation, and conservation.

Criteria for Current Use

For land to qualify for current use in New Hampshire:

• It must be undeveloped, forest, or farmland.

• It must be at least 10 acres in size.

Why Does Current Use Matter?

This is an important one for buyers and sellers to know because when a property that is in current use is being sold to be developed, the current use penalty must be paid to the town.  While every town is different, each town in NH has 18 months to determine exactly what the current use penalty will be.   While this cost is typically borne by the seller, the parties CAN negotiate on how they want it to be paid.  At Cohen, since we don’t know what the final penalty will be, we typically hold 10% of the seller’s proceeds as an estimate until the final bill comes in.  Any overage goes back to the seller upon the final bill coming out.  

If you have any questions or need assistance with properties in current use, feel free to contact us at Cohen Closing & Title.