"Buying Georgia Land That Is Already Under a Conservation Use Covenant: How Do I Keep the Lower Assessment?"

Somewhere in the deed records of the Georgia county where you are buying, filed and indexed next to the deed for the land, there is a sworn agreement the seller signed with the tax assessor. It runs for ten years from the date it started, and it is the reason the tax bill on the listing is so low, and on the day you close it becomes yours.

Yes, you can keep it. Georgia lets a buyer who qualifies as an owner continue the seller's conservation use covenant for the years left on it, with no breach and no penalty. You apply to the county board of tax assessors for a continuation by April 1 of the year after you close, and you take on the rest of the covenant's term as your own.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, NMLS #483943, through C2 Financial Corporation, licensed in fifteen states, including Georgia.

The covenant shows up in the title examination, and it helps to ask about it before you sign the contract. It is a commitment with years left to run, and continuing it is a decision you make rather than something that happens on its own.

What is a Georgia conservation use covenant, and why is it on the land I am buying?

Georgia taxes farmland, timberland and similar land at its value in that use rather than at what a developer would pay for it, when the owner agrees to keep it in that use for ten years. The program is called conservation use valuation assessment, the usual name for it is CUVA, and it lives in O.C.G.A. § 48-5-7.4, with the Department of Revenue's rules in Chapter 560-11-6.

The ten years are fixed by statute. The covenant period begins on the first day of January of the year the property qualifies and ends on the last day of December of the final year. So a covenant entered in 2022 runs through the end of 2031, no matter how many times the land changes hands in between.

The value the county uses comes from tables the state publishes in Rule 560-11-6-.09. Every other property in Georgia is assessed at 40 percent of its fair market value, and why the seller's property tax bill is rarely your bill walks through that ordinary side. This is Georgia's own program, and South Carolina and the other states nearby each handle farm and timber land differently.

Does the covenant come with the land when I buy it?

It does, and that is by design. When the county board of tax assessors approves a conservation use application, the statute has a copy filed with the clerk of the superior court, who indexes it in the real property records. The same section says that if the application is not recorded there, a transferee is not bound by the covenant. A recorded covenant binds whoever owns the land next, which is you.

Oconee County's conservation use FAQ tells owners that a title search of the property should show it is under covenant, for the protection of a buyer who may not know about it. Georgia is an attorney-closing state, and how a Georgia closing works explains why a lawyer controls yours from beginning to end. That lawyer's title examination is where the covenant surfaces, and you'll want to ask about it early.

So the low tax figure on the listing is accurate, and it also comes with conditions. That figure depends on the covenant, and once you close, keeping the covenant going is up to you.

How do I continue the covenant instead of breaking it?

Under § 48-5-7.4, if you would qualify to sign a covenant of your own, you can continue the seller's covenant for the rest of its term, and the county does not treat the sale as a breach. Four things decide whether that works for you.

You have to be a qualified owner. The statute allows a natural or naturalized citizen, an estate or trust whose heirs or beneficiaries are such citizens, a family-owned farm business such as a family LLC or family partnership, and certain nonprofit clubs. If you plan to take title in an ordinary investment LLC with unrelated partners, please raise that with your closing attorney before the contract is signed. The way you hold title can decide whether the county lets you continue.

You pick up the seller's clock, and you do not get a new one. If the seller entered the covenant in 2022, your continuation runs through the end of 2031. At that point you can apply for a fresh covenant of your own if you want one.

The application has a deadline, and it comes after closing. Rule 560-11-6 says an application for continuation upon a change in ownership is filed on or before the last date for filing tax returns in the year following the year the ownership changed. The Department of Revenue has Georgia property tax returns due between January 1 and April 1 each year. So your continuation is due by April 1 of the year after you close, whether you closed in June or on December 30.

It goes to the county board of tax assessors on the state's own form. The Department of Revenue's PT-283A, Application for Current Use Assessment of Bona Fide Agricultural Property, carries a line marking the covenant as a continuation for a given tax year. Some counties use their own packet, so please confirm which form yours wants.

You are not the only one who signs. County assessors read the rule as requiring the parties to the original covenant and the current owners to sign the continuation, and Morgan County's conservation use brochure puts it that way. In practice you will need the seller's signature months after they have handed you the keys. Your closing attorney is the right person to ask how to arrange that while everyone is still in the room.

What does continuing the covenant commit me to?

You are agreeing to keep the land in its qualifying use for the years left on the covenant. So the question to settle before you apply is what you plan to do with the land.

If you are buying sixty acres of planted pine to keep as planted pine, the continuation fits. If you are buying a pasture to cut it into ten lots over the next three years, the better move is to let the covenant end at closing and budget the tax bill at full value. Which activities qualify and which break the covenant are set out in the statute and in Rule 560-11-6-.06, Breach of Covenant. Your county board of tax assessors rules on whether your plan fits, so please ask them before you sign, with the plan described the way you actually mean it.

Under the statute, a breach during the covenant period brings a penalty on the entire tract. The amount is twice the difference between the tax paid under conservation use and the tax that would otherwise have been due, for each completed or partially completed year of the covenant. Interest runs from the date of the breach at the rate in O.C.G.A. § 48-2-40, and once any appeal is finished the penalty is collected the same way unpaid property taxes are.

If you are buying part of a larger covenanted tract, Columbia County's conservation use brochure adds one more thing. When a portion is sold to a qualifying buyer who later breaks the covenant, the penalty still applies to the entire tract, assessed against each party in proportion to the tax benefit each enjoyed. That means if you break the covenant on your part of the land, the seller can receive a penalty bill too, in proportion to the tax savings they had.

What does this change about my mortgage, my escrow and my timeline?

The mortgage rules themselves are the same in every state, and the covenant affects your loan in three places.

Your escrow account is built on the covenant bill. Most purchase loans collect property taxes monthly, and how an escrow account collects and pays property taxes walks through the mechanism. The monthly figure in your loan file comes from the tax bill that exists when the loan is set up, which on covenanted land is the conservation use bill. If the covenant ends because nobody applied, the county bills full value going forward and the escrow analysis spreads the shortage across your payment. A breach penalty is a one-time bill collected like unpaid property tax, and nothing in a mortgage payment sets money aside for it.

The appraisal and the county's value are two different numbers. The appraiser on your loan is estimating what the property is worth on the market, and the county's conservation use value is a tax figure from the state tables. What changes about the mortgage when you are buying a home on acreage covers the land side, and how an appraisal is read covers the lender's side. The county's lower tax value does not change what the appraiser says the land is worth, and it does not change what you can borrow.

The timeline has a date on it that comes after closing. Nothing about the continuation has to be finished before you close, though the seller's agreement to sign and a plain answer from the county on whether your use qualifies both belong before it. If you also intend to live on the property, the Georgia homestead exemption has its own April 1 filing, and it goes to the same county.

How do buyers lose the lower assessment by accident?

Buyers usually lose the lower assessment in one of two ways.

Assuming continuation is automatic because the covenant runs with the land. The covenant comes with the land on its own when you close, but the lower tax bill carries on only if you apply and the county approves your application.

Losing the seller. The continuation needs the parties to the original covenant to sign, and the seller is the hardest signature to collect once the sale is over. Please get that arranged before closing, through your closing attorney, rather than chasing a former owner in March.

An example, with invented numbers

Numbers below are made up to show the mechanism. They are not a quote, a prediction, or a statement about any real county or any real tract.

Two buyers each close in September on forty acres of timberland in the same Georgia county. Each tract is in year four of a covenant the seller entered in 2023, which runs through the end of 2032. The conservation use tax bill is about $600 a year, the full-value bill would be about $3,600, so the covenant saves about $3,000 a year.

The first buyer files the continuation. Before closing, their attorney confirms the seller will sign, and the county confirms that keeping the land in timber qualifies. In February the buyer and the seller sign the application, the county approves it, and the buyer carries the covenant through 2032 with the escrow account built on a bill of about $600.

The second buyer assumes the covenant takes care of itself. Nobody applies, April 1 passes, and the next bill arrives at about $3,600. The escrow account was collecting for $600, so the servicer runs an analysis and the monthly payment rises by about $250. Both buyers kept the land in timber the whole time, and the filing is the only thing they did differently.

Now suppose the first buyer, in 2029, clears ten acres for a small subdivision. That is a breach, and it reaches the entire tract. Six years of savings at about $3,000 a year is $18,000, doubled to $36,000, plus interest. Had that buyer known the plan at purchase, letting the covenant end at closing would have cost the ordinary full-value tax and nothing more.

Where to start

When you want to see this with your own numbers, the rate tool is here, with no credit pull, no account, and nobody calling you. You see pricing for your own scenario and your debt ratio, with closing costs priced for Georgia, and you choose the option that works best for you. The selection can change as your plans do.

When you are ready to make an offer on the land, get pre-approved for a Georgia mortgage and your income, debts and credit are reviewed properly rather than estimated.

Nothing here is a loan approval, a denial, a commitment to lend, tax advice, or legal advice. Conservation use covenants are Georgia property tax matters, and how any of it applies to your own land is a question for your county board of tax assessors, your closing attorney or your own tax adviser. No letter from anyone is a loan commitment, and final approval depends on the property, the appraisal and full underwriting.

Common questions

Does a Georgia conservation use covenant transfer to the buyer when the land sells?

Yes. Under O.C.G.A. § 48-5-7.4, an approved conservation use application is filed with the clerk of the superior court and indexed in the real property records, and a recorded covenant binds the next owner. Being bound by the covenant and keeping its lower assessment are two different things, and the second one requires an application for continuation from you.

How do I continue the seller's CUVA covenant after I buy Georgia land?

You apply to the county board of tax assessors for a continuation of the existing covenant. O.C.G.A. § 48-5-7.4 allows a person qualified to enter an original covenant to continue it for the remainder of the term with no breach. Under Ga. Comp. R. & Regs. 560-11-6 the application is due by the last date for filing property tax returns in the year after the ownership change, which in Georgia is April 1. County assessors expect the parties to the original covenant and the current owners to sign.

What is the penalty for breaking a conservation use covenant in Georgia?

Twice the tax savings, plus interest. O.C.G.A. § 48-5-7.4 sets the penalty on the entire tract at twice the difference between the tax paid under conservation use and the tax that would otherwise have been due, for each completed or partially completed year of the covenant. Interest runs from the date of breach at the rate in O.C.G.A. § 48-2-40, and the penalty is collected the same way unpaid property taxes are, once any appeal of the assessors' finding is concluded.

Will the conservation use covenant affect my mortgage on Georgia land?

It reaches the escrow account rather than the rate or the loan amount. The monthly tax figure in your loan is estimated from the bill that exists when the loan is set up, which on covenanted land is the conservation use bill. Continuing the covenant on time keeps that figure true. Letting it lapse means a full-value bill arrives, and the servicer's escrow analysis adjusts the payment to cover the shortage. The appraisal on your loan is a market value and is not affected by the county's conservation use value.