Our team at Green Hill Land & Forestry recently brokered the sale of a property that was enrolled in the Georgia Forest Land Protection Act, known as FLPA (pronounced “flippa”. We find that many landowners, buyers and sellers are not aware of the two primary covenants for land: 1) Forest Land Protection Act – FLPA and 2) Conservation Use Valuation Assessment – CUVA, which are county level tax covenants that have a positive tax benefit for landowners. For this article, we will review FLPA by answering some of the basic questions regarding the covenant.
What is FLPA?
Forest Land Protection Act (FLPA) is a tax exemption for large properties that are predominately timberland.
The Georgia Department of Revenue has a succinct definition as follows:
The GEORGIA FOREST LAND PROTECTION ACT OF 2008 (O.C.G.A. 48-5-7.7) provides for an ad valorem tax exemption for property primarily used for the good faith subsistence or commercial production of trees, timber, or other wood and wood fiber products and excludes the entire value of any residence located on the property.
This 15-year covenant agreement between the taxpayer and local board of assessors is limited to real property that is forest land at least 200 acres in aggregate which lies within one or more counties…
In short, if you enroll in this program with the county, you may significantly reduce your tax liability by agreeing to maintain at least half of your property as timberland or natural habitat.
What is the benefit of enrolling in FLPA?
Why would a landowner enroll in FLPA? Well for starters, they can continue to use their property, while enjoying the benefit of lower taxes.
For example, the 2023 taxes for a 400-acre property enrolled in FLPA were $2,360.52. If the property was not enrolled in FLPA, the taxes would have been $4,223.64. That is a savings of $1,863 or $30,000 (likely more) throughout the life of the covenant.
What properties Qualify for the Covenant?
For your property to qualify for FLPA, it must be real property of at least 200 acres owned by an individual, individuals, or any entity registered to do business in the state. To qualify, your property must be primarily used as timberland. This doesn’t mean your property has to be commercial timberland (planted pine), it can be a natural habitat as well. At least 50 % of the property must be in timber production or natural habitat to qualify for the covenant.
The technical definition states:
Such property has as its primary use the good faith subsistence or commercial production of trees, timber, or other wood and wood fiber products from or on the land. Such primary use includes land conservation and ecological forest management in which commercial production of wood and wood fiber products may be undertaken primarily for conservation and restoration purposes rather than financial gain. Such property may, in addition, have one or more of the following secondary uses:
(i) The promotion, preservation, or management of wildlife habitat;
(ii) Carbon sequestration in accordance with the Georgia Carbon Sequestration Registry;
(iii) Mitigation and conservation banking that results in restoration or conservation of wetlands and other natural resources; or
(iv) The production and maintenance of ecosystem products and services, such as, but not limited to, clean air and water.
What can I do with my property once it is enrolled in FLPA?
Most landowners that enroll in FLPA will likely hold their property for timberland investment, recreational use or may live on the property. Not to worry, you can still use and enjoy your property if it is enrolled in FLPA. Just make sure that at least half of the property is used for the qualifying purpose … Timberland or natural habitat. In most scenarios, you can continue to use the property as you normally would while paying less taxes!
Can I have a home or residence on the property?
Can I have a house on my property if it is enrolled in the Forest Land Protection Act? The answer is YES! The covenant allows you to put a residence on your property enrolled in FLPA, but the county will identify the underlying land and exclude it from the covenant. In short, they will allow you to have your residence on the property, but will tax it at the normal rate, not the reduced rate associated with the covenant.
How Long is the Covenant?
The covenant is for 15 years.
What happens if I Breach the Covenant?
The penalties can be severe for breaching the covenant. If you breach the covenant, the penalty is double the amount saved for every year of the covenant plus interest.
Can I sell my property if it is enrolled in FLPA?
Yes, you may sell your property if is enrolled in FLPA, provided the property is at least 200 acres and the purchaser continues the covenant. If you only want to sell a portion of your property, that portion must be at least 200 acres, or you as the seller will have breached the covenant and will have to pay the penalty for breaching the entire covenant, not just on the portion you are selling.
We have had certain situations in which the tax assessor has approved properties to be divided in at least 100-acre sections without a breach. It is always best to consult with your local tax assessor before selling a property that is enrolled in a preferential tax covenant such as FLPA
When working with buyers and sellers, we make sure to include language stating the buyer will continue the covenant and will be liable in the event they breach the covenant. This provision protects the sellers and clearly ensures the buyer understands they must continue the covenant and that they don’t inadvertently breach the covenant. Furthermore, the attorney will often include this provision in the deed.
When is the enrollment period and who do I contact?
You should contact your local tax assessor and enroll between January 1st – April 1st, or within the time period for filing property assessment appeals.
Please contact your local tax assessor regarding any questions or specifics regarding this tax covenant.
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