New Hampshire current use tax: how it works, what it saves

Last updated 2026-08-14

What is current use tax in New Hampshire?

New Hampshire's current use program, created under RSA Chapter 79-A, taxes open space land (including forestland, farmland, and wetlands) based on its "current use" value rather than its fair market value. If you own 10 or more contiguous acres of qualifying open space, you can apply to have your town assess that land using state-set current use values instead of the value a developer or homebuyer would pay for it. The gap between the two numbers is usually large. A wooded parcel that might assess at several thousand dollars an acre on the open market can carry a current use value of a few hundred dollars an acre or less, depending on soil class and land type. The state's Current Use Advisory Board sets a range of per-acre values each year for categories like unproductive land, wet land, and various forest soil classes, and your town's assessor picks a value within that range ^[1]. This isn't a tax exemption. It's a different valuation method. You still pay property tax, just on a much lower assessed value as long as the land stays in qualifying open space use. The tradeoff is the Land Use Change Tax that hits if you change the land's use later, more on that below.

Who qualifies for current use in NH, and how do you apply?

To enroll, you generally need at least 10 contiguous acres of open space land in a single municipality, excluding your house lot and the land under it (New Hampshire requires you to exclude a minimum of two acres around your residence). Forestland, farmland, wetland, and unproductive land all qualify under different categories with different per-acre values. You apply through Form A-10, the Current Use Application, filed with your local assessing officials by April 15 for that tax year ^[2]. The application asks you to describe and map the parcel by land use category (this is where a lot of owners get help from a licensed forester, since accurately splitting acreage into forest soil classes affects your final value). Some towns want a sketch map; others will accept a tax map with acreage breakdowns. Once enrolled, you don't have to reapply every year. The classification stays on the property unless you change the use, subdivide, or otherwise trigger a review. If you're just starting the paperwork, our forest management guide walks through what documentation towns typically want alongside the A-10 form.

What is Forest Management, and why does it matter for current use?

"Forest management" in this context means the ongoing set of decisions and actions, cutting schedules, stand improvement, access roads, wildlife considerations, that a landowner or forester makes to keep a woodlot healthy and productive over time. It's distinct from just owning trees and leaving them alone; current use doesn't require active harvesting, but many owners pursue basic forest management to keep the land productive and to potentially qualify for the Stewardship (lower) current use rate. New Hampshire offers a reduced current use assessment for forestland enrolled with a documented forest management plan that meets state stewardship criteria, sometimes called the "stewardship" land use category, which typically carries a lower per-acre value than unmanaged forest categories ^[1]. Getting that lower rate usually means having a plan prepared or reviewed by a licensed forester. If you're weighing whether to pay for a forester's stewardship plan versus staying in the standard forest category, run the math: get the current use value difference for both categories from your assessor, multiply by your acreage, and compare the annual savings against the one-time cost of a forest management plan (commonly a few hundred to over a thousand dollars depending on acreage and consultant, though you should get quotes locally). For a primer on what a plan actually covers, see forest management and forestry management.

What is the Forest Management Bureau?

New Hampshire doesn't have an agency called the "Forest Management Bureau" by that exact name; forestry oversight in the state runs through the Division of Forests and Lands within the Department of Natural and Cultural Resources, and county-level forestry extension work runs through UNH Cooperative Extension ^[3]. If you've seen the term "Forest Management Bureau" referenced elsewhere, it's likely a generic description of that state forestry division's regulatory and technical assistance functions, not a formally named department in NH statute. The Division of Forests and Lands administers state forest lands, coordinates wildfire response, licenses foresters, and provides technical guidance on timber harvesting and forest health. For current use questions specifically, day-to-day administration sits with your local assessing officials, with policy and valuation guidance coming from the state's Department of Revenue Administration and the Current Use Advisory Board ^[1]. If you need a licensed forester for a stewardship plan or timber sale, the Division of Forests and Lands and UNH Extension both maintain forester resources; check with your state forestry agency for current listings and licensing requirements before hiring anyone ^[3].

What triggers the Land Use Change Tax, and how much is it?

The Land Use Change Tax (LUCT) is the penalty New Hampshire charges when land enrolled in current use gets converted to a non-qualifying use, most commonly development, subdivision for building, or clearing for non-forest, non-agricultural purposes. Under RSA 79-A:7, the LUCT is 10% of the full and true (fair market) value of the land at the time of the change, not 10% of the current use value ^[4]. That 10% rate is set by statute and applies to the change in use, assessed as of the date the land use actually changes, determined by the assessing officials of the municipality where the land sits. It's a one-time assessment, separate from your ongoing annual property tax bill. Building a driveway to a new house lot, clearing acreage for a solar array, or subdividing off a buildable parcel can all trigger it depending on how your town interprets the change. Cutting timber does not, by itself, trigger the LUCT. Harvesting is generally treated as compatible with continued current use classification, provided the land stays in qualifying open space use afterward and isn't converted to development. If you're planning a harvest and want to avoid accidentally triggering a change-of-use review, loop in your assessor before cutting near property lines or access roads, since grading and permanent structures for logging access can sometimes raise questions.

Are there other penalties or compliance risks in the NH current use program?

Beyond the Land Use Change Tax, the main compliance risks are unintentional disqualification (letting the parcel drop below 10 acres through a sale or gift, for example) and disputes over land use classification at reassessment. New Hampshire law requires assessing officials to periodically review current use parcels, and if they determine the land use category was misclassified, they can adjust the assessment going forward, sometimes with back taxes depending on the circumstances and local practice. Subdividing enrolled land is a common trigger point. If you sell off a few acres and the remaining parcel dips under the 10-acre minimum, or if the sold-off piece changes use, that piece can face the LUCT even if the rest of your land stays enrolled. Estate planning and generational transfers deserve particular attention here: transferring land to heirs doesn't itself trigger LUCT, but what the heirs do with it afterward can. Recreational trails, wildlife food plots, and most forest stand improvement work generally don't threaten your classification. Building a permanent structure, paving significant acreage, or filing to change zoning designation are the moves that usually start a conversation with your assessor. When in doubt, ask your municipality's assessing office in writing before you act, not after.

How are timber sales taxed in New Hampshire?

New Hampshire taxes timber two ways that landowners often confuse. First, the state levies a Timber Tax (sometimes called the Yield Tax) under RSA 79:1 et seq. at the time of cutting, generally 10% of the stumpage value of wood cut, assessed by the town based on a Report of Wood Cut/Intent to Cut filing ^[5]. This is separate from current use and applies whether or not your land is enrolled. Second, timber sale income has federal (and, in limited cases, state) income tax consequences depending on how you held and sold the timber. New Hampshire does not have a broad personal income tax on wages or ordinary capital gains, but the state does tax certain interest and dividends income (that tax has been phasing out and, per the Department of Revenue Administration, was repealed effective for tax periods beginning on or after January 1, 2025) ^[6]. Because New Hampshire's general income tax structure is limited, most of the tax planning around a timber sale in NH happens at the federal level. Before any harvest on current use land, you're required to file an Intent to Cut form with the town, and the town assesses the yield tax based on reported stumpage value once the cutting is done ^[5]. Skipping this filing is its own compliance problem, independent of your current use enrollment status.

Do you have to pay taxes on timber sales?

Yes. Timber sale proceeds are generally taxable income at the federal level, and in New Hampshire you'll also owe the state's yield/timber tax (about 10% of stumpage value) at the town level regardless of your federal tax situation ^[5]. Whether the federal tax hits as ordinary income or capital gain depends on how you held the timber and the sale structure. If you owned the timber as an investment or personal-use asset held longer than one year, a lump-sum timber sale is often eligible for long-term capital gains treatment under Internal Revenue Code Section 631, rather than ordinary income rates . If you're in the business of growing and selling timber (a timber business, not casual ownership), the tax treatment and reporting forms differ, and you may need to track basis, depletion, and business expense deductions more formally. This is genuinely one of the more consequential decisions in a timber sale and it's worth getting an accountant who's handled timber sales before you sign a contract, not after.

How do you report timber sales on your tax return?

For most non-business landowners selling standing timber in a lump-sum sale (selling the timber "as is" for a set price, with the buyer taking the cutting risk), the sale is typically reported as a capital gain or loss on Schedule D and Form 8949, using your timber's cost basis (or allocated basis if you inherited or bought the land with timber on it) to figure gain . You'll need to know your basis in the timber specifically, more than your basis in the whole property, which is why establishing a timber basis at purchase or inheritance matters. See basis of land for how to think through that allocation. If you sold timber under a pay-as-cut contract (buyer pays per unit as timber is harvested) and you're electing Section 631(b) treatment, that election and reporting typically flows through Form T (Forest Activities Schedules) in certain business contexts, and capital gains reporting on Form 8949/Schedule D otherwise; the IRS's guidance on timber sales, including Form T requirements, is in Publication 225 (Farmer's Tax Guide) and related IRS timber tax guidance maintained through the USDA Forest Service's cooperative resources . Owners with a documented forest management plan, timber basis records, and receipts from a licensed forester or logger tend to have a much easier time at tax filing and in the event of an audit. That's the exact kind of documentation gap our $149 Current-Use Enrollment & Compliance Kit is built to help you organize, alongside your current use application paperwork, though it doesn't replace an accountant or forester's professional work.

How do you avoid or reduce capital gains tax on a timber sale?

There's no way to make timber sale gains disappear, but a few legitimate strategies reduce the bite. First, confirm you qualify for long-term capital gains rates (federal rates of 0%, 15%, or 20% depending on income, versus ordinary income rates that can run higher) by holding the timber more than one year before sale and structuring it as a qualifying disposal under Section 631 . Second, make sure your timber basis is fully documented and allocated correctly. Many landowners never establish a timber basis when they buy land, which means they report the entire sale as gain when in fact part of it should offset against basis. If you inherited land, your basis often steps up to fair market value at the date of death, which can dramatically reduce reportable gain on a later sale if you get a timber cruise or appraisal done near that date to document value . Third, timing and spreading a large harvest across multiple tax years, if your situation allows it, can keep you in a lower capital gains bracket rather than pushing the whole sale into one high-income year. None of this is a substitute for a CPA who's actually done timber sale returns before; the stakes on a single large harvest are usually high enough to justify the fee. For general forest planning that ties into a future sale, see timber management.

How much can current use actually save a New Hampshire landowner?

The honest answer is: it varies by town, land classification, and soil type, so confirm your specific numbers with your county assessor and the state's published current use value ranges before assuming any figure. That said, the mechanism is straightforward: current use values for most forest and unproductive land categories are commonly in the range of roughly $25 to a few hundred dollars per acre, compared to market-value assessments that in many NH towns run into the thousands of dollars per acre for wooded land near development pressure ^[1]. A 30-acre forested parcel assessed at, say, $4,000/acre market value versus $150/acre current use value represents a swing of roughly $115,500 in assessed value, which at a typical NH municipal tax rate translates into a meaningful annual property tax difference (do this math with your actual town's mill rate, since NH tax rates vary widely by municipality and school district). The state's Department of Revenue Administration publishes current equalized tax rates by municipality if you want to run your own numbers before applying .

What's the difference between current use and other forest tax programs?

New Hampshire's current use (RSA 79-A) is a use-value assessment program, not a separate tax bracket or credit. It sits in a similar policy family to other states' "greenbelt" or "open space" use-value programs, but the specific acreage minimums, penalty rates, and valuation methods differ by state. If you own land in more than one state, don't assume NH's 10-acre minimum or 10% LUCT rate applies elsewhere; each state's forest tax program has its own statute and administering agency. Within New Hampshire, current use (79-A) is also distinct from the state's separate timber yield tax (RSA 79), the tree farm land tax exemption for state-managed forests, and various conservation easement tax treatments that can stack with current use in some cases. If you're comparing your options across programs or against other states, our forest mgt and forestmanagement guides break down how enrollment mechanics differ.

Frequently asked questions

What is the Forest Management Bureau in New Hampshire?

New Hampshire doesn't have an agency formally named the Forest Management Bureau. Forestry oversight runs through the Division of Forests and Lands within the Department of Natural and Cultural Resources, with UNH Cooperative Extension providing additional forestry technical assistance and licensed forester resources ^[4].

What is forest management?

Forest management is the set of ongoing decisions, cutting schedules, stand improvement, road and access planning, wildlife habitat work, used to keep woodland healthy and productive. In NH, a documented forest management plan from a licensed forester can qualify land for a lower current use assessment category ^[2].

How do I report the sale of timber on my tax return?

Most lump-sum timber sales are reported as capital gains on Schedule D and Form 8949, using your documented timber basis to calculate gain. Pay-as-cut contracts with a Section 631(b) election have separate reporting requirements, sometimes involving Form T. See IRS Publication 225 for details ^[8][9].

How do I avoid capital gains tax on a timber sale?

You generally can't avoid it entirely, but you can reduce it: hold timber over one year for long-term capital gains rates, document your timber basis fully (especially with a stepped-up basis after inheritance), and consider spreading a large harvest across tax years. Talk to a CPA experienced with timber sales before you sell ^[8][9].

Do I have to pay taxes on timber sold from my land?

Yes, generally. Timber sale proceeds are usually taxable at the federal level as capital gains (if held long-term) or ordinary income (if you're in the timber business), and in New Hampshire you'll also owe the state's roughly 10% yield tax on stumpage value at the town level ^[6][8].

Do you pay taxes on timber sales in New Hampshire specifically?

Yes. New Hampshire charges a Timber/Yield Tax of about 10% of stumpage value at the town level under RSA 79:1, filed via an Intent to Cut and Report of Wood Cut, separate from any federal capital gains tax owed on the sale proceeds ^[6].

How are timber sales taxed at the federal level?

Federal treatment depends on how you held the timber and the sale structure. Long-term ownership (over one year) with a qualifying disposal under Internal Revenue Code Section 631 often gets capital gains rates; timber businesses may report differently with basis, depletion, and expense deductions ^[8].

What acreage do I need to qualify for NH current use?

You generally need at least 10 contiguous acres of qualifying open space land in a single municipality, not counting your house lot and a minimum 2-acre exclusion around your residence. Smaller parcels typically don't qualify under RSA 79-A ^[1].

What is the Land Use Change Tax in New Hampshire?

It's a one-time penalty under RSA 79:7, equal to 10% of the land's full market value at the time of change, charged when current-use-enrolled land is converted to a non-qualifying use like development or subdivision. Timber harvesting alone doesn't typically trigger it ^[5].

Does cutting timber on current use land trigger a penalty?

No, not by itself. Harvesting timber is generally compatible with continued current use enrollment as long as the land stays in qualifying open space use afterward. You still owe the separate yield tax on the wood cut, and you must file an Intent to Cut form first ^[6].

How do I apply for current use in New Hampshire?

File Form A-10, the Current Use Application, with your local assessing officials, generally by April 15 for that tax year. You'll need to map and classify your land by use category, which is where many owners get a forester's help to maximize accuracy and value ^[3].

Can I lose my current use classification?

Yes. If your parcel drops below the 10-acre minimum (through a sale, for example), if you change the land's use, or if an assessor determines the classification was wrong at review, you can face reclassification and potentially the Land Use Change Tax on the affected acreage ^[1][5].

Is New Hampshire current use the same as a tax exemption?

No. Current use changes how your land is valued (at use value instead of market value), it doesn't exempt you from property tax. You still pay tax annually, just on a much lower assessed value, with a potential penalty tax if you later convert the land to non-qualifying use ^[1].

Sources

1. NH Department of Revenue Administration, Form A-10 Current Use Application: Application form and April 15 filing deadline for current use enrollment
2. NH Department of Natural and Cultural Resources, Division of Forests and Lands: State forestry oversight runs through Division of Forests and Lands, not a separate 'Forest Management Bureau'
3. NH Department of Revenue Administration, Interest and Dividends Tax: NH Interest and Dividends Tax repealed effective for tax periods beginning on or after January 1, 2025
4. IRS Publication 225, Farmer's Tax Guide (timber sale provisions): Timber held long-term and sold under Section 631 can qualify for capital gains treatment; reporting guidance
5. USDA Forest Service, National Timber Tax website resources: Timber basis allocation and stepped-up basis at inheritance affect reportable gain on timber sales
6. NH Department of Revenue Administration, Municipal Tax Rates and Related Data: Municipal property tax rates vary widely across NH towns, used to estimate current use savings