California Code of Regulations › Title 18 - Public Revenues › Division 1 - State Board of Equalization-Property Tax (California Department of Tax and Fee Administration - Timber Yield Tax, See Chapter 11) › Chapter 1 - Valuation Principles and Procedures › Section 54 - Valuation of Land Under a Land Conservation Act Agreement that Fails to Qualify Under Rule 51

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Land (other than timberland), fruit- or nut-bearing trees,
				  and vines subject to an enforceable Land Conservation Act agreement that,
				  according to the criteria set out in section
				  51 of this chapter, do not qualify
				  for assessment under section
				  423
				  of the Revenue and Taxation Code shall be appraised at market value, pursuant
				  to section
				  402.1 of that Code. Any
				  conflicting assessment provisions in the agreement are unconstitutional and
				  shall be disregarded.
The market value of such land, or of such land and
				  perennials, shall be estimated by using either the comparative sales method or
				  the income method or both.
(a) The
				Comparative Sales Approach. If the comparative sales method is used and the
				restrictions imposed by the agreement have more than a minimal effect on the
				value of the property, the recently sold properties to which the subject
				property is compared shall be those similarly restricted as to use and
				preferably so restricted for a similar remaining period. If there is
				substantial evidence, however, that the restrictions on the subject property
				will be removed or materially modified in the predictable future, the subject
				property may also be compared with recently sold properties which have natural
				limitations on their use that are adjudged to have substantially the same
				effect as the legal limitations on the subject property. The sold properties
				shall also have the characteristics described in section
				402.5
				of the Revenue and Taxation Code.
(b) The Income Approach. If the income method
				is used and the restrictions imposed by the agreement have more than a minimal
				effect on the value of the property, the appraiser shall proceed as follows:
(1) Estimate, preferably by reference to sale
				prices of comparable properties not subject to Land Conservation Act agreements
				or contracts, the market value that the land, or the land and perennials, would
				have on the current lien date if the property were not subject to the agreement
				but were subject to any other applicable restrictions and assume that this will
				be the value of the land, or of the land and perennials, when free of the
				agreement restrictions;
(2) Using a
				market-derived capitalization rate (including an appropriate property tax
				component), find the present worth of the value derived in step 1 deferred by
				the number of years or fractions thereof until the land, or the land and
				perennials, will be freed of the agreement restrictions by a notice of
				nonrenewal that has already been given or by a notice that could be given prior
				to the agreement's next anniversary date;
(3) Using the capitalization rate prescribed
				by section
				423(b)
				of the Revenue and Taxation Code or a capitalization rate otherwise derived
				that is appropriate for an income stream which does not include capital
				appreciation, estimate the present worth of the income (including any amenities
				not represented by money income) from the restricted use of the land, or of the
				land and perennials, during the period between the lien date and the date to
				which the value derived in step 1 is deferred:
(4) Add the present worths derived in steps 2
				and 3.