Land Use Value Assessment/Agricultural & Forestal Districts
Land use value assessment taxes real estate based on its usage, instead of its fair market value. As a result, agricultural lands & open spaces, that omit development potential, can be subject to lower taxes, providing an opportunity for Va. localities to preserve long-term public benefits. In an Agricultural & Forestal District, property owners agree not to convert their farm or forest land to a more intense land use. Benefit to property owner = eligible for land use-taxation, which assesses taxes on the current, not the potential use value of the property.
Use value assessments reduce development pressure on open space & agricultural lands. Localities can focus these programs to preserve ecologically valuable land with benefits for flood & stormwater mitigation.
Property tax reduction can be especially valuable for farmers who reside in localities with high land values & development pressures.
Ex: James City County - ag & forestal district program preserves over 15,000 acres of farm operations.
Loudoun County Ordinance Chapter 1226 Ag & Forestal Districts
"...policy of the County to conserve, protect and encourage the development and improvement of its agricultural and forestal lands for the production of food and other agricultural and forestal products. It is also the policy of the County to conserve and protect agricultural and forestal lands as valued natural and ecological resources which provide essential open spaces for clean air sheds, as well as for aesthetic purposes...1226.02 Effect of Districting (a) All land use planning decisions, special exceptions, special use permits and variances affecting any parcel of land within or adjacent to a District shall take into account the existence of the District and the purposes and policies of this chapter… (b) Land used in agricultural and forestal production within a District shall automatically qualify for an agricultural or forestal value assessment..."
- Preserves essential open space without the costs of property acquisition
- Benefits property owners without the need to permanently restrict development rights
- Additional land parcels can easily be added to existing districts
- Discourage land uses that do not keep with agricultural, forestal, or open space uses (greater degree of development restriction than an agricultural zone, which can encourage low-density residential sprawl)
- May only temporarily impede development in ecologically-sensitive areas (development is not restricted in perpetuity)
- Requires interest from property owners
Land Use Value Tax: 118 Va. localities have enacted land use assessment ordinances (Knapp & Kulp, 2015). Eligible land uses include agricultural/horticulture, forest, & open space. Parcels must be > 5 acres to qualify as agriculture/open space, or > 20 acres to qualify as forest under a use-value taxation. (Va. Code § 58.1-3233). Localities can allow other parcels to qualify if enabled by code. Ex: Small forested parcels adjacent to bodies of water.
Ag & Forestal Districts: minimum size requirement = 200 acres. Multiple landowners, & contiguous tracts of land can be combined into one large district. Local advisory committee approves districts (usual life of 4-10 years). Localities must take districts into account for planning decisions & cannot unreasonably restrict agricultural/forestal activity within the district. Landowners are also afforded additional protection from eminent domain. An update in 2011 streamlined the process for creating Districts & clarified that additional parcels can be added to districts at any time.
1: Up to 1,450 points (Activity 420, Open Space Preservation (OSP), Manual pg. 420-3):
Credit for preserving open space in the floodplain. Extra credit for open space land protected by Deed Restriction (Activity 420, DR, pg. 420-11). Extra credit for open space parcels preserved in or restored to their natural state (Activity 420, NFOS, pg. 420-13).
2: Up to 250 points (Activity 420, Open Space Incentives (OSI), pg. 420-20):
Credit for tax incentive programs to keep land undeveloped.
Code of Virginia, § 58.1-3231:
Authority for the assessment & taxation of ag & forestal land
Code of Virginia, § 10.1-1009:
Virginia Conservation Easement Act
Code of Virginia § 10.1-1700:
Virginia Open-Space Land Act
Code of Virginia, § 58.1-512:
Land Preservation Tax Credits
26 USC §170; 26 CFR 1.170A-14
Qualified conservation contributions
Criteria for establishing an Ag & Forestal District (Fairfax County)
Manual of the State Land Evaluation Advisory Council: Includes model use value assessment ordinances
Jarbeau , S. H., & Stiff, M.-C. (2015). Flood Protection Pay-Offs: A Local Government Guide to the Community Rating System. Wetlands Watch.
Knapp, J., & Kulp, S. (2015). Virginia Local Tax Rates, 2014. Weldon Cooper Center for Public Service.
Moser, S., & Ekstrom, J. (2012). Identifying and Overcoming Barriers to Climate Change Adaptation in San Francisco Bay. California Energy Commission.
Schmidt, K. (2011). Recent Changes to the Virginia Agricultural and Forestal District Act. USDA
VA APA. (2014). Managing Growth and Development in Virginia: A Review of the Tools Available to Localities. Virginia Chapter of the American Planning Association.