You wanted to know the conditions under which tax assessors can assess golf courses as open space and how this differs from the way they assess other properties. You also wanted to know how some Fairfield County towns assess golf courses. As we agreed, we will answer this question in a separate memo.

SUMMARY

The law provides a mechanism to preserve farms, forests, and open spaces, including golf courses, from the pressure to develop them for more intensive uses. That pressure occurs when the property tax assessment on the land increases as it becomes more attractive for development, which could happen because assessors normally assess property based on its fair market value, not the value of its actual use.

The fair market value of a farm, forest, or open space could be more than its current actual use value because developers may be willing to pay a higher price to buy and develop the land. That willingness, gauged by the amounts they pay for comparable land, translates into a higher tax assessment, which could cause the owner to sell the land. To prevent this, the law sets conditions under which assessors must assess such land based on its current use without regard to development pressure.

The law does not specify how assessors must determine current use value, but the Connecticut Supreme Court upheld a method used to determine the value of a golf course based on the value of comparable raw land and improvements made to it.

CURRENT USE ASSESSMENTS

Statutory Requirement

The law sets conditions under which assessors must treat certain types of properties, including golf courses, differently than others. Assessors must classify farms, forests, or open spaces separately from other types of property and determine their value solely on the basis of how they are being used without regard to their potential resale or fair market value, which reflects the highest and best use one could make of the undeveloped land (CGS § 12-63(a)).

Intended Effect

Towns must still tax all properties, regardless of how they were assessed, at 70% of their assessed value (CGS § 12-62a (b)). But assessing farms, forests, and open spaces based solely on how they are used could yield an assessment that is lower than one based on fair market value. This more likely to happen if neighboring homes, stores, or factories attract developers to the undeveloped land. The law was designed to shield the land from the effects of development pressure:

To prevent the forced conversion of farm land, forest land and open space land to more intensive uses as a result of economic pressures caused by the assessment thereof for purposes of property taxation at values incompatible with their preservation as farm land, forest land and open space land (emphasis added; CGS § 12-107a).

Determining Current Use Value

The law does not specify the method assessors must use to determine a property's current use value except to bar assessors from assessing classified open space land at less than what the assessment would have been if the land had been classified as farmland instead (CGS § 12-63 (a)). The validity of the assessor's method for determining current use value could depend on whether the assessment came out lower than one based on fair market value.

The Connecticut Supreme Court used this standard to uphold the assessment of a golf course that was based on current use (Rustici v. Stonington, 174 Conn. 10 (1977), Attachment 1). The course's owners claimed that the assessment was too high, contradicted the law's stated purpose, and should have been based on the highest value of farmland. The assessor based the assessment on the sale of comparable raw land in town and the value of the improvements made to it and showed that the result was significantly lower than one based on fair market value.

The court upheld the assessment, finding that it was strictly based on the land's current use value without considering the effects of neighboring developments, such as stores and office parks.

CONDITIONS FOR ASSESSING GOLF COURSES BASED ON CURRENT USE VALUE

Golf courses qualify as open space if they "enhance public recreation opportunities." Towns can designate these and other types of properties as open space if it would:

1. conserve natural or scenic resources;

2. protect natural streams and water supplies;

3. help conserve environmentally sensitive areas, such as wetlands and tidal marshes;

4. enhance the value to the public of adjoining parks, forests, wildlife preserves, nature preserves or sanctuaries, or other open spaces;

5. preserve historic sites; or

6. promote orderly development (CGS § 12-107b(c)).

The owner of the golf course or other property meeting these criteria can ask the assessor to base the assessment on current use only if:

1. the town's plan of conservation and development specifically recommends preserving the property as open space and

2. the town's legislative body voted to accepted the recommendation (CGS § 12-107e(a)).

The owner must then apply to the assessor to have the property classified and assessed at its current use value within the timeframe (CGS § 12-107e (b)). He tacitly waives the right to have the property assessed at its current use value if he fails to apply within the statutory time frames, thus triggering an assessment based on fair market value (CGS § 12-107(c)).

The assessor must determine the value based on the property's current use if he finds that it has not changed in a way that "adversely affects its essential character as an area of open space land" (CGS § 12-107e (b)). The owner can appeal the assessor's decision to the board of assessment appeals or Superior Court (CGS § 12-107 (d)).

JR:ts