What is Clean and Green in Pennsylvania?
In 1974, Pennsylvania enacted a law amid fears that farmers were going to be taxed off their lands and their property would be paved over. Clean and Green is most often advertised as a way to help the struggling farmer. It allows for owners to apply for a reduced property tax assessment if they have 10 acres or more and fall under three categories: (1) agricultural use (working farm); (2) forest reserve (wooded areas); and (3) agricultural reserve (open space). Properties of less than 10 acres are able to be a part of the program, provided that they can prove that at least $2,000 in annual income is through agriculture.
The properties are assessed based on their use value (i.e. their earning power as a farm or woodlot), rather than their value in the real estate market. On average, properties in Clean and Green have a 50% reduction in their property assessment value.
The Clean and Green Act can save property owners substantial property taxes, however there are significant consequences if the property use changes. In exchange for the reduction in property assessment value, the property owners agree to keep their property as is. If the property owner decides to develop any of their land while registered in Clean and Green, they are forced to pay back seven years’ worth of tax savings plus 6 percent interest, known as roll-back taxes. Additionally, if a property owner separates a portion of his land, then it may trigger roll-back taxes.
If you are thinking about registering your property for Pennsylvania Clean and Green and have any questions regarding the Program, do not hesitate to contact our office.