Generally speaking, Pennsylvania (and York County specifically) is renowned for its rich agricultural history and diligent land preservation. In the last half-century, perhaps the most substantial contributor to this heritage is the “Pennsylvania Farmland and Forest Land Assessment Act of 1 974,” also known as the “Clean and Green” Program. This legislation was passed in response to the economic realities and difficulties confronting Pennsylvania farmers during the 1970s.
Difficulties confronting Pennsylvania farmers at this time included low prices for farm output, low yields, high labor costs, and burdensome taxes. The enactment of the Clean and Green Program was designed to mitigate some of these harsh economic burdens on farmers.
The Clean and Green Program incentivizes the preservation of agricultural and forest reserve lands by providing tax savings for enrolled land. Provided that land meets certain size, use, and other requirements, landowners who enroll in the Clean and Green Program will enjoy the benefits of a reduced assessment rate. Based on annual reports conducted by the Pennsylvania Department of Agriculture, the average reduction in property taxes for enrollees in the Clean and Green Program is nearly fifty percent.
While the Clean and Green Program provides incentives for enrolling land, the Program also implements deterrents to prevent land from being taken out of Clean and Green. The primary deterrent of the Clean and Green Program is the imposition of rollback tax liability. Rollback tax liability is exactly what it sounds like – when land that was previously given preferential assessment is no longer eligible, the landowner will not only lose the preferential assessment rates but will be liable to pay back the fair market value assessment (plus interest) for the preceding seven years.
Critically, changes in ownership and changes in the use of land enrolled in the Clean and Green Program can give rise to rollback tax liability for both buyers and sellers. While some of the situations leading to rollback tax liability are intuitive, there are other situations where the imposition of rollback taxes come as an unfortunate surprise to these individuals. In some cases, landowners find themselves liable for rollback taxes not only for their own land, but for the land of others as well! Therefore, it is imperative that you receive accurate information regarding any conveyance of land enrolled in the Clean and Green Program.
For help with real estate transactions involving land enrolled in Clean and Green, contact Attorney John R. Wilson at [email protected] or another CGA attorney to set up a consultation.
John R. Wilson
John R. Wilson provides legal services to Litigation, Bankruptcy, Government, and Education Law clients. Prior to joining CGA Law Firm, John served as an Advisor for the Mason Veterans and Service Members Legal Clinic, where he represented clients in military proceedings, veterans’ appeals, and civil matters. John focused his legal studies on national security law and policy, serving as a research assistant to the National Security Institute and the Articles Selection Editor of the National Security Law Journal.Read John’s Bio Page in full here.