What is New Hampshire current use tax? A landowner's guide

Last updated 2026-08-14

What is New Hampshire current use tax?

Current use is New Hampshire's statewide property tax program that lets owners of qualifying open space, farmland, and forest land get taxed on the land's "current use" value rather than its "highest and best use" (development) value. The program comes from RSA 79-A, the Land Use Change Tax, and it's administered jointly by your town's assessing officials and the state Current Use Board ^[1]. The idea is simple: undeveloped forest and farmland shouldn't be taxed as if it's about to become a subdivision. Instead, the state sets use-value ranges each year for different land categories (forest land, farm land, wetland, unproductive land), and towns apply those ranges when they assess enrolled parcels. For most wooded parcels, current use assessment runs somewhere around 20% to 25% of full fair market value, though the exact number depends on your town's equalization ratio and which category your acreage falls into. It's not a rebate. It's not a state check you get every year. It's an assessment method, and it lowers your annual property tax bill only because it lowers the assessed value your town's tax rate gets applied to. If you sell or develop the land later, you owe a one-time Land Use Change Tax on the difference. More on that below.

Who qualifies for current use in New Hampshire?

You need a minimum of 10 contiguous acres in a single ownership to enroll open space or forest land in current use, per RSA 79-A:2 ^[1]. Smaller wetland-only or unproductive parcels sometimes qualify without hitting the 10-acre threshold, but for typical woodlot owners, 10 acres is the floor. Land doesn't have to be actively logged to qualify. Passive forest land, land with wetlands, and farmland all count as long as it's undeveloped and not used for a business structure or residential lot beyond the excluded homestead area. Your house and up to 2 acres directly around it (called the "unproductive" residential exclusion in some towns) generally do NOT get current use treatment, only the surrounding wooded or open acreage does. There's no requirement to have a licensed forester's management plan just to enroll in basic current use in New Hampshire, which differs from some neighboring states. But if you want the deeper "stewardship" reduction (an additional 20% reduction off the forest land use value for parcels with a certified forest management plan under RSA 79-A:4-a), you'll need a plan prepared by a licensed forester and filed with the town. That's a real professional engagement, not paperwork you can fake your way through, and it's worth budgeting for if you own more than 25 or 30 acres, since the savings compound over the years. If you're weighing whether the extra step is worth it, read up on forest management basics before you commit to a licensed forester's plan.

How do I enroll in current use in New Hampshire?

You apply by filing Form A-10, the "Application for Current Use Assessment," with your local assessing officials (usually the town or city assessor) by April 15 of the tax year you want the assessment to start ^[2]. The form is a state Department of Revenue Administration form, and every town uses the same one. The process, step by step: 1. Get a copy of Form A-10 from the NH DRA website or your town office ^[2]. 2. Identify your parcel's acreage by category (forest land with or without documented stewardship, farmland, wetland, unproductive land) using your deed and tax map. 3. File the completed A-10 with your assessing officials before April 15. 4. The assessor reviews the application, may inspect the property, and applies the current use value ranges the state Current Use Board sets that year. 5. Your next tax bill reflects the reduced assessment. There's no state filing fee for the A-10 itself, though some towns charge a small recording fee if a change in use or ownership later requires you to re-file. Check with your county registry of deeds for exact recording costs, since they vary by county. If you're assembling documents for this (deed, tax map, acreage breakdown, stewardship plan if applicable), it helps to have a checklist before you sit down with the assessor. That's the kind of prep work our $149 one-time Current-Use Enrollment & Compliance Kit is built around: it organizes the forms and documentation most towns ask for, though it doesn't replace a licensed forester's stewardship plan if you're going for that additional reduction.

What is the Forest Management Bureau?

The Forest Management Bureau isn't a separate agency; it's a division within the New Hampshire Division of Forests and Lands, part of the Department of Natural and Cultural Resources. It handles state forest management planning, the Tree Farm and stewardship certification programs, and technical assistance for private woodland owners ^[3]. If you're pursuing the stewardship reduction in current use (that extra 20% cut in assessed forest land value under RSA 79-A:4-a), the Division of Forests and Lands is the state body that maintains standards for what counts as a qualifying forest management plan, and it works alongside licensed foresters who actually write those plans for landowners ^[3]. The bureau itself doesn't write your plan; a licensed forester does that, working from state guidelines. For general questions about whether your woodlot qualifies, or to find licensed foresters practicing in your county, the county forester network and UNH Extension are good first calls. Your town assessor can also point you to the right contact if you're unsure whether your land use plan meets the bar.

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

If you take land out of current use, generally by developing it, subdividing it for non-agricultural use, or changing its use to something that no longer qualifies, you owe the Land Use Change Tax (LUCT). The rate is 10% of the full, undiscounted fair market value of the land at the time of the change, not 10% of the current use value ^[1]. This is the big number people miss. If you enrolled 20 acres years ago at current use value and it's now worth $8,000 an acre on the open market because a subdivision moved in next door, taking that land out of current use could mean a LUCT bill north of $16,000 for those 20 acres (10% of $160,000). The tax is assessed against the land that changed use, and it applies at the moment of change, not spread over years. RSA 79-A:7 also lays out exceptions: transferring the land to a conservation organization, certain easement changes, and some involuntary conversions (like taking by eminent domain) don't trigger LUCT ^[1]. But an ordinary sale to a buyer who then builds a house on it? That triggers it, and often the tax bill lands on whoever owns the land the moment it changes use, so buyers and sellers both need to understand the timing before closing. For a full rundown of penalty triggers and how towns calculate the change tax, our rollback-and-penalties coverage goes deeper on this specific mechanic across states.

Do I have to pay taxes on timber sold from my New Hampshire woodlot?

Yes, but not through your property tax bill in the way you might expect. New Hampshire has a separate timber tax under RSA 79:1 et seq., a yield tax of 10% assessed on the stumpage value of timber cut and sold, collected by the town where the cutting happens ^[4]. This applies whether or not the land is enrolled in current use. Before you cut, the landowner (or their agent) files an "Intent to Cut" form with the town, and after the harvest, a "Report of Cut" documents the actual volume and value, which the town uses to calculate the 10% yield tax ^[4]. Certain categories are exempt: firewood for personal use under a set volume, Christmas trees, and a few others, but commercial timber sales generally owe the yield tax. This local yield tax is separate from federal income tax. On your federal return, timber sale proceeds are usually reported as a capital gain if you held the timber as an investment or incidental to your personal residence, using your adjusted basis in the timber (from Form T, Forest Activities Schedule, when required) to figure the taxable gain ^[5]. If you're actively in the business of growing and selling timber, the income might instead be ordinary business income, so the reporting mechanics depend on how you hold and manage the land. Because both a local yield tax and a federal tax question can apply to the same harvest, it's smart to loop in a tax preparer before you sign a timber sale contract, not after.

How do you report timber sales on your tax return?

For most non-commercial woodland owners, timber sale proceeds get reported as a capital gain on Schedule D (and Form 8949) of your federal Form 1040, using the timber's cost basis (what you paid for it, or its value when you inherited or acquired it, allocated specifically to the timber component separate from the land) ^[5]. The IRS Farmer's Tax Guide explains that gains from the sale of standing timber held long-term as an investment generally qualify for capital gains treatment ^[5]. To use this treatment correctly, you generally need to know your timber's adjusted basis, which comes from a forester's timber cruise or appraisal done at the time you acquired the property, allocating part of your purchase price to standing timber versus bare land. If you never established a basis, a retroactive timber cruise by a consulting forester can sometimes reconstruct a defensible number, though it's not guaranteed the IRS will accept every method. Larger commercial operations sometimes elect to treat qualifying timber cutting as a Section 631(a) gain, which lets you recognize gain on standing timber you cut for use in your own business as a capital gain rather than ordinary income, using the timber's fair market value on the first day of the tax year as your basis for that calculation ^[6]. This is a specific election with its own IRS form requirements (Form T, Part II), and it's not the default treatment, so don't assume it applies without checking with a preparer familiar with timber transactions. Bottom line on reporting: gather your basis documentation, your Form 1099-S or contract records from the buyer, and any Report of Cut filed with your town, before tax season. Our internal guide on timber-management walks through the paperwork trail in more detail.

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

There's no way to fully avoid tax on a profitable timber sale, but a few legitimate strategies reduce it. First, make sure you're using your full adjusted basis in the timber; too many landowners report the entire sale price as gain because they never established a basis when they bought the land, which overstates the tax owed ^[5]. Second, if you've held the timber more than a year and it qualifies as a capital asset (not held primarily for sale to customers in the ordinary course of business), long-term capital gains rates apply instead of ordinary income rates, which is usually a meaningful difference depending on your tax bracket ^[5]. Third, the Section 631(a) or 631(b) elections can convert what would otherwise be ordinary income (for someone in the timber business) into capital gain treatment, but these require specific elections and forms, and they're not something to attempt without a preparer who has actually filed a Form T before ^[6]. Fourth, consider timing. Spreading harvests across tax years, or coordinating a sale with a year when your other income is lower, can reduce the marginal rate that applies. None of this is a loophole; it's just using the rules on the books correctly, which is exactly the kind of thing a tax preparer experienced with timber sales earns their fee doing.

How does current use interact with timber sales? Do you owe more tax when you cut?

Cutting timber on current-use-enrolled land does not, by itself, remove the land from current use or trigger the Land Use Change Tax. Harvesting is considered part of normal forest management, and RSA 79-A explicitly contemplates that enrolled forest land gets cut periodically ^[1]. However, the separate yield tax under RSA 79 still applies to the stumpage value of what you cut, regardless of current use status ^[4]. So a landowner with enrolled forest land who does a harvest owes the 10% yield tax on that harvest, same as anyone else, but keeps their reduced current use property assessment as long as the land stays undeveloped forest afterward. Where people get tripped up is confusing "cutting timber" with "changing land use." If a harvest is followed by construction, subdivision, or another qualifying change, the change (not the cut itself) is what triggers LUCT. A clearcut that's part of a documented forest management plan, followed by regeneration, generally does not disqualify the parcel from current use.

What does current use cost or save, in real numbers?

Full market value (non-enrolled)	Comparable sales, development potential	Town assessor
Current use value (enrolled forest land)	State-set per-acre range by soil/forest class	NH Current Use Board, applied by town
Stewardship-qualified forest land	Current use value minus 20%	Requires licensed forester's plan under RSA 79-A:4-a	The savings are real for most qualifying owners, but the exact dollar figure depends entirely on your town's tax rate and which use category your acres fall into. Don't take a number from a forum post or a neighbor's bill as gospel; ask your town assessor to run both figures side by side for your parcel.

New Hampshire's Current Use Board sets statewide value ranges each year for different land categories, and towns pick a value within that range based on local conditions. For forest land without a stewardship plan, current use values have historically run in the range of roughly $57 to $155 per acre for the better forest classes (numbers vary by soil productivity category and by year, so always check the current board schedule). Compare that to full market assessments in many NH towns, which for buildable, unforested rural acreage can run into the several thousands per acre depending on location. The practical effect: a 30-acre wooded parcel that might be assessed near $150,000 to $300,000 at full market value in a desirable NH county could instead be assessed in the range of a few thousand dollars total under current use, once you apply the per-acre use values. Multiply the assessment difference by your town's tax rate (often expressed per $1,000 of assessed value) to estimate your annual savings, but confirm the current year's use-value schedule with the Department of Revenue Administration and your specific town's tax rate before you count on any figure ^[2]. | Assessment basis | Typical value driver | Who sets it |

What records do I need to keep once I'm enrolled?

Keep your filed Form A-10, any stewardship or forest management plan documents, your Intent to Cut and Report of Cut filings for any harvests, and correspondence with your assessor about acreage classification. If ownership changes (sale, gift, inheritance, LLC transfer), most towns require notification and sometimes a new application, since current use runs with specific ownership and use conditions under RSA 79-A ^[1]. If you subdivide even a small piece (say, to give a lot to a family member), that carved-out piece may trigger LUCT on the portion removed, even if the remainder stays enrolled and above the 10-acre minimum. Always ask your assessor before any subdivision, easement change, or structure addition. Keeping organized, dated records is the single best protection against a dispute over penalty calculations down the road. This is the exact gap our Current-Use Enrollment & Compliance Kit is meant to close, a one-time $149 tool to help you organize the forms, acreage documentation, and filing history your town and the state expect, so you're not scrambling for paperwork during an audit or a sale.

What's the difference between current use and forest management plans?

Current use is the tax assessment program; a forest management plan is a document, usually written by a licensed forester, that lays out how you'll manage your woodland over time (thinning schedules, regeneration goals, wildlife considerations, harvest timing). In New Hampshire, you don't need a forest management plan for basic current use enrollment, only for the additional 20% stewardship reduction. That said, a management plan is good practice independent of the tax benefit. It documents your basis for later timber sales, helps you sequence harvests for better prices and forest health, and gives you a paper trail if your land use is ever questioned. If you're weighing whether to hire a forester, our guide on forestry-management covers what a typical plan includes and roughly what it costs to commission one. Worth noting: some states (Vermont's Use Value Appraisal program, for example) require a forester-prepared management plan for ANY current use enrollment, more than an optional add-on. New Hampshire's baseline requirement is lighter, which is part of why it's historically had one of the higher enrollment rates among Northeastern current use programs.

Frequently asked questions

What is New Hampshire current use tax in simple terms?

It's a property tax assessment method under RSA 79-A that taxes qualifying open space, forest, and farm land based on its current use value (often 20% to 25% of market value) instead of its full development value, as long as the land stays undeveloped and meets the 10-acre minimum.

What is the Forest Management Bureau in New Hampshire?

It's not a separate agency; it refers to forestry functions within the NH Division of Forests and Lands, which sets stewardship standards, runs Tree Farm and technical assistance programs, and maintains forester referral lists for landowners pursuing current use's stewardship reduction.

What is forest management, and do I need a plan to enroll?

Forest management is the practice of planning harvests, regeneration, and stand health over time, usually documented by a licensed forester. New Hampshire doesn't require a plan for base current use enrollment, only for the additional 20% stewardship reduction under RSA 79-A:4-a.

How do you report the sale of timber on a tax return?

Report timber sale proceeds on Schedule D and Form 8949 as a capital gain, using your adjusted basis in the timber. Commercial operators may instead use Section 631(a) or 631(b) elections via Form T. Always keep your basis documentation and sale contract for the IRS.

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

You generally can't avoid it entirely on a profitable sale, but using your full adjusted basis, qualifying for long-term capital gains rates, and considering a Section 631 election can legally reduce the taxable amount. A preparer experienced with timber sales can confirm which options apply to you.

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

Yes. In New Hampshire, a local 10% yield tax applies to stumpage value under RSA 79, regardless of current use status. Separately, federal capital gains tax usually applies to your net gain over your timber's adjusted basis, reported on your federal return.

Do you have to pay taxes on timber sales if the land is in current use?

Yes. Current use enrollment lowers your annual property tax assessment but doesn't exempt timber harvests from New Hampshire's separate 10% yield tax, nor from federal capital gains tax on your sale proceeds.

How are timber sales taxed at the federal level?

Timber sales are typically taxed as capital gains if held as an investment for more than a year, using your adjusted basis to calculate the gain. Commercial timber businesses may instead face ordinary income treatment unless they elect Section 631(a) or 631(b) capital gain treatment.

What triggers the Land Use Change Tax in New Hampshire?

Developing, subdividing for non-agricultural use, or otherwise removing land from a qualifying current use classification triggers the LUCT, a one-time tax of 10% of the land's full fair market value at the time of the change, per RSA 79-A.

How many acres do I need for New Hampshire current use?

You generally need a minimum of 10 contiguous acres in single ownership to enroll open space or forest land in current use under RSA 79-A:2. Some wetland or unproductive land categories have different minimums, so confirm specifics with your town assessor.

When is the deadline to apply for New Hampshire current use?

Form A-10 must be filed with your local assessing officials by April 15 of the tax year you want the reduced assessment to start. Late applications typically roll to the following tax year, so confirm the exact deadline with your town office.

Does cutting timber remove my land from current use?

No. Normal forest harvesting under a management plan does not disqualify enrolled land from current use. The Land Use Change Tax is triggered by a change in land use, like development or subdivision, not by the act of harvesting timber.

Sources

1. New Hampshire General Court, RSA 79-A: Current Use Taxation: Statutory basis for current use taxation, 10-acre minimum, and Land Use Change Tax at 10% of full value
2. NH Department of Revenue Administration, Form A-10: Application for Current Use Assessment (Form A-10) and April 15 filing deadline
3. NH Division of Forests and Lands, Forest Stewardship Program: State forestry agency role in stewardship standards, Tree Farm program, and forester referrals
4. New Hampshire General Court, RSA 79: Timber Tax: 10% yield tax on stumpage value, Intent to Cut and Report of Cut filing requirements
5. IRS, Publication 225 (Farmer's Tax Guide) and Timber Tax basics: Capital gains treatment for standing timber held as investment, adjusted basis requirement
6. USDA Forest Service, Southern Research Station, Tax Tips for Forest Landowners: Section 631(a) and 631(b) elections for capital gain treatment on timber cut for business use, and Form T reporting