if you renew a tree growth plan in maine and
In Maine, the Tree Growth Tax Law is a long-term commitment, and the penalties for removing land enrolled in the program can indeed vary depending on how long the land has been in the program. If you renew your Tree Growth Plan and decide to withdraw from the program after just two years, the penalties can be significant, reflecting the length of time the land has been enrolled.
According to the resources gathered, the penalty for removing land from the program early can be as high as 30% of the difference between the tree growth valuation and the fair market value, especially if the land has been enrolled for a shorter duration. As you progress beyond the initial years, these penalties can adjust, with a relatively lower percentage for longer periods of enrollment. For example, lands that have been in the program for 20 years or longer carry a penalty of around 20% (Link: https://rudmanwinchell.com/2015/07/23/maine-s-tree-growth-tax-law-considerations-for-maine-s-timberland-owners/).
It is important to fully understand the implications of your decision to withdraw, as properly notifying the Town or State Tax Assessor is a requirement when wanting to exit the program (Link: https://digitalmaine.com/cgi/viewcontent.cgi?article=1236&context=for_docs). For detailed guidance, you can refer to the official Maine government resources available here and here.
In summary, while the penalties for removal may be substantial after two years, they depend on various factors, including how long the property has been enrolled, and a good understanding of these details is crucial before making changes to your Tree Growth Plan.
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