Land Use Assessments for Virginia Taxes

In Virginia there is legislation that encourages the preservation of agricultural, forest, horticultural and open spaces.  This legislation provides tax incentives for landowners to protect their lands from development.  Virginia law provides for eligible land in any of these categories to be taxed based upon the land’s value in use (use value) as opposed to the land’s market value.  Why does this matter?  Because your taxes can be reduced by the “Land Use” value of rural properties when you own your farm or estate in VA.  Not all Virginia counties participate in this program, and some counties participate only in portions of the program, see map below.

You can find more detailed information about the map above and its counties who participate in land use tax assessments, by going to the Map of Virginia Counties Tax Use.   Here is a great site to explain the history and nature of Land Use regulations in Virginia.

Land Use is not identical to a Conservation Easement.  Land Use is more of a tax relief supporting agriculture; and Conservation Easements are more of a land preservation vehicle … although both may offer tax breaks.   Unlike the ‘perpetual’ nature of Conservation Easements,  Land Use properties must be actively used for an eligible agricultural activity and the tax reduction has to be reapplied for periodically.  Thus in simple terms, Land Use tax assessments are not perpeptual;  the property must continually meet the terms of activity that qualifies for a tax break.  So if a purchaser does not continue with an eligible agricultural activity on the property, or if for some reason does not re-apply for the Land Use qualification in a timely manner, the tax break ceases.  When a property is removed from Land Use status, an issue known as ‘rollback taxes’ can occur, and this can impact the tax liability of either the buyer or the seller at the time the property transfers.  Click this link if you want more specifics in our article about RollBack Taxes.

Each Virginia county is a little different, but because Charlottesville is located in Albemarle County we often work with properties that have met the Albemarle County Land Use standards and procedures.  That link also gives the specific requirements for a property to qualify under Albemarle County’s four classifications of (1) Agriculture  (2) Horticulture  (3) Forest Use  and (4) Open Space.

If you’d like to discuss any of this further, just give me a call.  I’ve handled the sale of country properties for years and I also have a good network for you to choose professionals to answer any specific legal or financial questions too.