February 23, 2007
ASSESSING GOLF COURSES
By: John Rappa, Principal Analyst
You asked if the law allows tax assessors to decide how to determine the value of golf courses classified as open space, how they actually determine that value, and whether any statewide organization advises them on how to do so.
Under certain conditions, tax assessors must determine the value of unimproved golf course land based only on the value of that use (i.e., current use value; CGS § 12-63(a)). In other words, they must ignore the value of the land if it were to be used for a higher and more profitable purpose, such as a condominium or office park. Consequently, determining the golf course's value based solely on that land use usually results in a lower assessment (and tax bill) than determining its value based on a potentially higher and more profitable use.
The current use assessment applies to the unimproved sections of a golf course. Assessors must still determine the value of clubhouses, maintenance facilities, and improved land based on their fair market value, which is the standard they must use to determine the value of all other property.
(Attachment 1 is an OLR report that describes the statutory conditions under which assessors must determine the value of golf courses as well as farms, forests, and open spaces based on their current use instead of their potential resale or fair market value (2001-R-0744).)
Although the statutes require assessors to determine the value of golf courses based on their current use, they do not specify how assessors must determine that value. Consequently assessors have flexibility when determining current use values. (On the other hand, the statutes specify the methods assessors must use for determining fair market values. In both cases, though, property owners can appeal the assessment to the local board of assessment appeals.)
In practice, it appears that most assessors determine current use value based on the Department of Agriculture's recommended “Public Act 490 Land Values.” (“490” refers to the number of the 1963 act that authorized current use assessments). We based this conclusion on the responses we received to a 2006 online survey of towns to identify those that did not use these values. Of the 83 towns that responded, only 22% (18) did not use the recommended values. (Attachment 2 is the OLR report on the survey (2006-R-0059).
As Attachment 3 shows, the department classifies land based on it soil characteristics and calculates its dollar value per acre. The values are the same throughout the state except in the 21 Connecticut River Valley towns, where the values are higher. It redetermines these values every five years. The last time it did so was in 2005. Most assessors base the current use value of unimproved golf course land on the recommended value for land used to grow shade tobacco and burlap nursery (i.e., Tillable A), Windsor tax assessor Steve Kosofsky stated. Kosofsky is also the legislative liaison for the Connecticut Association of Assessing Officers (CAAO). The value for Tillable A land is $1,665 per acre for Connecticut River Valley towns and $1,200 for the other towns.
CAAO provides technical assistance and training to assessors on a range of topics, including how to assess 490 land. Its 14 standing committees includes one devoted to 490 assessments and its certification course on assessment valuation addresses 490 valuations.
CAAO's 2005 Handbook for Connecticut Assessors chapter on assessing 490 land discusses the Agriculture Department's recommended land values but does not specify other methods that could be used to determine current use value. The handbook advises assessors who derive other values for 490 land that they must have done so “in compliance with § 12-63. That is, they must reflect the present true and actual value of classified farm, forest, and open space land based upon the land's current use without regard to neighborhood land use of a more intensive nature” (p. 7.17).