Tuesday, January 3, 2012

Michigan Qualified Forest Program


For an owner or buyer of land in Michigan there is a relatively new program called the Qualified Forest Program to provide owners of forest lands with a tax break. This program has some similarities to the Commercial Forest Act program that much of the land in the Upper Peninsula is enrolled in. The CFA program provides a more aggressive tax incentive, but among other drawbacks, allows for public access. 

The Commercial Forest Act was designed for large owners of timber land, primarily paper and timber companies. The language and detail of the CFA program are intended to easy the tax burden on large acreage corporate properties, while providing lands that are open to public access for hunting and recreation. Recently , there has been a growing trend of these properties marketed for sale in smaller parcels to the general public. The CFA program was not intended for the private owner and this is causing some issues with both buyers of new properties and the State. While it may work for some, the CFA program usually is a problem for a buyer. In short, most buyers purchase a property for the purpose of having their own private parcel and this is in conflict with the Commercial Forest Act. 

In 2006, new legislation brought another option to the table. The Qualified Forest Program was designed with the smaller, private owner in mind. A 20 acre minimum enrollment was a decrease of 1/2 the size the CFA program requires. The other main difference is that lands in the Qualified Forest Program remain private and can be posted as "No Trespassing". The tax break is not as significant, but it does relieve some burden. There are additional stipulations and requirements which may not be for everyone or every property, but this does provide an excellent option. 

I have yet to work on a property in Qualified Forest, but I think it will start to catch on in the near future. Most of the requirements are things that a good land manager should do anyway. It is not a good option for those who plan to sell in the near future, but a great way to save on tax dollars for long term property owners of private timber lands. 

The link below is an overview of the program. For more information look up "Qualified Forest" on the Michigan DNR website.

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