Waking From a Property Tax Nightmare

Image Gallery If this farmer does his homework, he can arrange to have his land taxed at a significantly lower rate that the land next to him. PHOTO: GRANT HEILMAN

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Can neighboring development actually make you broke?.

In 1981, we bought 40 acres on top of a mesa and then ten acres on one side to get a road up. It was classified rural and bad state land on the lower end of the mesa. In 1993 and 1994, we bought three other parcels around the rocky face of the mesa, for a total of 120 acres. The population of the area has been increasing rapidly and recently a nationwide land developer bought a 6,500 acre ranch to the west and has been selling it as high priced ranchos. As a result, our property valuation for tax purposes just increased 400% in one year. The land we purchased is the rocky side of the mesa, which is not suitable for building. Also, there is no water (three dry wells), no electricity, and a very poor jeep road.

We've heard it is possible to recombine land parcels into a whole and designate it conservation land to stem runaway tax values and preserve it from development. The alternative would force us to sell the land to the developer because we couldn't afford to stay. It is a very special place and deserves to be protected, particularly since it is visible for miles around.

Can you tell us if a conservation area is do-able in Arizona? What would be required and how would we go about it? What might the tax savings be? Thank you very much for this and other great work you are doing.

—Gwendellyn McKnight China Valley, AZ

Your mesa sounds both stark and very beautiful. It is a shame, but whenever land is sold in volume for higher prices, it always drives up the value and consequent land taxes for nearby parcels. Upon checking with the assessor's office in Yavapai County where your land is located, it came to light that unlike some states, Arizona has no conservation-land tax break. However, there is a considerable tax break for land that is used for agricultural purposes. To qualify for this tax rating, the land must be used for legitimate profitable agricultural purposes and not as hobby land or recreation only. Your land might be utilized as grazing land to meet this qualification. Non-desert grazing land may be taxed at $7.56 per acre, and desert land, as yours appears to be, as low as $3.50 per acre, or less. To apply for this tax classification, you must produce livestock or lease your land to a rancher. The production should be consistent with the land. For example, if you lease your land for grazing you need only to lease it for the number of livestock units that the land will support. It is not necessary to overgraze the piece in order to qualify, but the lease must be at fair market value, not simply a nominal amount an attempt to lower the taxes.

For more information call the Yavapai County Assessor satellite office at phone (520) 639-8121. Ask for David "Bo" Boivert. He is the agricultural tax-class expert and he will be able to give you details on applying for the agricultural tax classification. The assessor's office can also tell you if you will receive any benefit by combining you parcels into one pieces. I wish you a happy tax relief. I have spent thousands of dollars, been through three attorneys, read books, researched, asked old timers, etc., about my problem, and no one can give me black-and-white answers. On my property is a 40-foot-wide strip of land designated/or ingress and egress to a parcel of land behind my parcel. A man bought that parcel plus all of the land surrounding my parcel. I do understand that I must keep the easement open because it is on my deed. This is no problem.

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