Property Tax Relief

Property Tax Relief for Woodland Owners

Property taxes pay for important local government services authorized by elected officials, but they are a significant annual cost for forest landowners. Landowners may not fully recover management investments, including property taxes, when trees grow 30 to 100 years before harvest and ownership changes about every 20 years. In addition, your land management provides wildlife habitat, watershed protection, aesthetics, and biodiversity that benefit many Minnesotans who pay no forest management costs. Because of the public benefits your forest land provides, the Minnesota Legislature created the Sustainable Forest Incentive Act (SFIA) and the 2c Managed Forest Land Classification (Class 2c) to reduce ownership costs on sustainably managed forest land. (Mel Baughman, University of Minnesota)

This table briefly explains these options:

SFIAClass 2c
20 acre minimum20 acre minimum
No maximum acreage enrolled1,920 acre maximum enrolled
Public access required if  more than 1,920 acres enrolledPublic access not required
Exclude 3 acre minimum for buildingExclude 10 acre minimum for building
8 year minimum enrollment; 4 years to end agreement; 50 year maximum1 year minimum enrollment
Pay usual property tax, class rate varies from 0.50% to 1.25% depending on class and property’s value. Get $7.00/acre/year minimum incentive payment ($9.13- $16.15/ acre/ year actual payment in 2020)Pay 0.65% Property Tax Class Rate
Property tax qualifies for itemized deduction on federal income tax return, but SFIA payment is taxable incomeProperty tax qualifies for itemized deduction on federal income tax return

Current rates on incentive payments can be found at: Sustainable Forest Incentive Act

For more information, please contact: Aitkin County SWCD