At SVN Cornerstone we want you to know as much as possible about the costs and implications of buying or selling your property. Any of our brokers are ready and equipped to walk you through the process.
Are you considering buying or selling land? If so, there could
be tax implications you may not now about.
What is the Current Use Program? According to the Spokane County Assessors office there are more
than 11,500 parcels in Spokane county that are in the Current Use Program. This program provides
significant tax reductions on land used to enhance public uses of open space, to grow commercial crops,
and to grow and harvest trees. If the Buyer of the land plans to keep it in its current use, then they will
need sign a continuance on the real estate excise tax affidavit. If that is the case then no taxes, penalties,
or interest will be due at that time. If they do not plan to keep the land in that program at the time of
the sale, then the Seller will be responsible for paying the back taxes, interest, and penalties.
What if the new buyer changes the use after the sale or does not provide adequate proof to be in the
program? If either of these are the case, then the new owner will be responsible for paying 7 years of
taxes, interest, and penalties EVEN IF he or she has owned the land for less than 7 years.
How are the taxes, interest, and penalties calculated? As mentioned earlier the current owner will be
responsible to pay 7 years back taxes, interest, and penalties if they fail to provide proof required by the
program, change the land use or is selling the property without a signed continuance on the real estate
excise tax affidavit from the Buyer. The back taxes are calculated by taking the difference between the
current use value, the market value of the property and the tax rate from the previous year. As for the
interest, it is applied at the delinquent rate for the past 7 years and a 20% penalty rate is added.
Why do they charge back taxes, interest and penalties for changing the use? The purpose for having to
pay back taxes, interest and penalties is to encourage long-term retention of land in these programs. It
is meant to discourage people from using the “current use” value temporarily rather than paying the
“highest and best use” value they would normally pay.
What if the use is for Growing Trees? The most common use in the Current Use Programs is for Open
Space and Farming but there is also a program for Timber and Designated Forest Program. Again, with
these programs the property goes by the current use rather than highest and best use value. The taxable
value goes by the productivity rating and the soil type. The difference between the Timber Program and
Designated Forest is the size of land. If the property is less than 20 acres, is used for growing trees, has a
timber management program the owner can apply for the Timber Program. For owners who have 20
acres or more for the commercial purpose of growing trees then they could apply for the Designated
Forest Program without a forest management plan. One thing to keep in mind for the Designated Forest
Program, when a property is removed form the program it will be 10 back taxes but with no interest or
penalties. The back taxes is the difference between the market value and current use value tax.
Want more information? All this information can be found on the Spokane County Assessor website
here. If you would like to contact the Current Use Appraiser it’s best to email as they receive a high
volume of calls. Email email@example.com or call 509-477-4789 and leave a message just remember it
can take up to two weeks for a call back.