Ohio Farm Bureau Landowner Toolkit - Page 8

Current Agricultural Use Valuation (CAUV) Current Agricultural Use Valuation (CAUV) is a program which values property based upon its value for agricultural productivity, rather than fair market value, for tax purposes. CAUV was designed to follow the farm economy; resulting in higher values in times of prosperity and lowered values if the farm economy falters. Even as CAUV values increase, landowners typically still see a significant discount from fair market value if enrolled in the CAUV program. Property Taxation and Exceptions to the Rule The Ohio Constitution requires that all property be taxed uniformly.98 This traditionally has meant all land is taxed at its fair market value, or the value at which it would change hands between a willing seller and willing buyer.99 A constitutional amendment in 1973 allowed for farmland to be valued differently, using the capitalized net income from agricultural activities to value land or the land’s current agricultural use value (CAUV).100 At that 98 99 100 Ohio Constitution, Article XII, Section 2 ORC 5713.03 Ohio Constitution, Article II, Section 36 time, the value of land at its “highest and best” use was quickly becoming the value used to figure real estate taxes, allowing development pressure to push up the taxable value of farmland. With CAUV, the land value depends upon capitalizing the expected net income from farming, making the taxation of farm real estate more fair and reasonable. All properties have four individual values, which are aggregated to find the total property value. The four individual values represent the home, a one-acre home site, other buildings and all other land. CAUV can only apply to the “all other land” portion of a property’s value. Land values are reappraised on a 17