Land Use Assessments

Commissioner of the Revenue – Sherry T. Sours

 Linda M. Fuller, MDCR III Commissioner of the Revenue
Real Estate Dept. Supervisor, Real Estate Assessor
P.O. Box 1775
Front Royal, VA  22630

220 N. Commerce Ave., Suite 900
Front Royal, VA  22630
Phone (540) 635-2651
Fax (540) 636-8280

WHAT IS LAND USE ASSESSMENT?

In 1971, the Virginia General Assembly enacted a law permitting localities to adopt a program of special assessments for agricultural, horticultural, forest and open space lands. The Warren County Board of Supervisors chose to adopt an ordinance based on State Law to conserve acreage that may otherwise be developed.

The purpose of the Land Use Program is to encourage the proper use of such real estate in order to assure a readily available source of agricultural, horticultural and forest products and of open spaces; conserve natural resources to prevent erosion and protect adequate and safe water supplies; to preserve scenic natural beauty; to promote proper land-use planning and orderly development of real estate.

When your land qualifies for Land Use taxation, the parcel receives a lower assessment than the fair market assessment.  The difference in tax dollars is not a total abatement, but rather a deferment.  Taxpayers owning real estate that meets the qualifications may enter the program under one or more of the following categories:  Agricultural Use, Horticultural Use, Forestal Use or Open Space Use.

The minimum acreage requirements for special classes of real estate shall be determined by adding together the total area of contiguous real estate, excluding recorded subdivision lots, titled in the same ownership.  Properties separated by a public right of way are considered contiguous.

WHAT ARE THE QUALIFICATIONS FOR SPECIFIC LAND USE CATEGORIES?

AGRICULTURAL & HORTICULTURAL USE CATEGORIES:

Virginia State Code requires a minimum of five (5) or more contiguous unimproved acres or six (6) acres for improved parcels.   One acre is excluded for a house site or for a proposed house site.  The remaining five acres or more may qualify for Land Use taxation.  The property must have a five (5) year history of continuous farming or horticultural activity before qualifying on the sixth year.  If land is left vacant one year or more, the farm history must begin again for five continuous years.

The entire farm must be qualified with adequate livestock: One mature cow, one mature horse,  five goats, five sheep, or five swine per five acres or sixty (60) chickens or turkeys per acre for twelve (12) months.  Horses can qualify the land only if they are being used for a breeding or boarding BUSINESS.  Horses maintained exclusively for recreational purposes DO NOT qualify the land. One acre of cropland may qualify one acre.  The average crop yield per acre on each crop grown must be equal to at least one half of the county average for the past three years.   HORTICULTURAL crops (fruits, nuts berries, vegetable, nursery, or floral products) must be produced for commercial use only in order to qualify. Gross sales must average more than $1,000 annually over the previous three years.

When applications for Land Use taxation under agricultural use are received and approved, the values from an expanded capitalization method known as the Shenandoah model are applied to each parcel.  Costs are calculated by review of the National Agricultural Statistics Service (NASS), Schedule F returns, and consultation with local farmers.  Costs can then be converted to an average overall default net multiplier or an individual net crop income multiplier to obtain the net income for crops and uses.  Local agricultural lending institutes can be used as sources of information for data on the development of the capitalization rate.

FORESTAL USE CATEGORIES:

Forestal use category requires at least twenty (20) contiguous acres unimproved or twenty one (21) or more acres improved acreage exclusively devoted to forestry with NO LIVESTOCK ACCESS.  Forestal acreage with livestock access must be qualified under the Agricultural Use Category.  NO stripping or clear cutting is permitted unless under guidance of the Virginia Department of Forestry.  Forestal participants are required to have a forestry plan.  This plan can be obtained from an independent forester. The Commissioner of the Revenue’s office has a list of independent foresters.  Value of forestal  acreage for land use purposes is obtained by the Commissioner of Revenue’s Office from sales studies of pulpwood, saw timber and firewood  provided by the Virginia Department of Forestry.  Landowner must notify the Commissioner of the Revenue’s office of any change or modification of their forestry plan.

OPEN SPACE CATEGORIES:

The open space use of the property must be consistent with the land use plan of Warren County.  A land use consistent with the land use plan means a use that is consistent with areas of land use zones depicted on a map that is part of the Land Use plan, or that directly supports or is generally consistent with stated land uses, natural resources conservation or historic preservation objectives, goals or standards of the land use plan. Property may also qualify under the “WHIP” program for the preservation of certain wildlife grasses and wildlife or wetland preservation.  Minimum acreage is five (5) acres.

A property that is subject to a recorded perpetual conservation, historic, or open-space easement held by any public body, or is part of an agricultural, forestal or agricultural and forestal district approved by local government, shall be considered to be consistent with the Land Use plan.  This category DOES NOT refer to open, unused land. 

HOW DO I APPLY FOR LAND USE ASSESSMENT?

By State Law and County Ordinance, applications for Land Use Taxation on NEWLY PURCHASED parcels NOT in land use at time of purchase, must be made by October 1 prior to the tax year for which reduced taxation is sought, or within sixty (60) days of purchase.   If you sell acreage from a tract under Land Use, you must reapply within sixty (60) days of the transaction to put the remaining acreage back in the program.

INCOME TAX DOCUMENTATION:

Those taxpayers who are in Land Use under Agricultural or Horticultural Use must submit a copy of Federal 1040 income tax schedule C (business), schedule E (supplementary income -  which is mostly applicable to those who lease the land) or schedule F (farm profit or loss) when revalidation is due  (in general reassessment year.)   These forms may be requested to show the five (5) year history of continuous farming prior to being approved for Land Use.  If you do not file one of these schedules, you will be required to submit documentation of a “bona fide” farm operation in another manner:  feed receipts, fertilizer receipts, receipts from sale of livestock/crops, etc.  Gross sales must average more than $1,000 annually over the previous three (3) years.

FEES:

The application fee is $10.00 per parcel payable to the Treasurer of Warren County.

APPROVAL:

Approval of all applications is made by the Commissioner of the Revenue based on the use of the parcel, documentation submitted, acreage, etc.  In some instances, you may be requested to submit additional information before an application can be processed.  If at any time, it should be determined that the parcel does not continue to meet the requirements to be taxed under a Land Use Assessment, it will be removed from the Land Use Program.  NO fees will be refunded on parcels removed from the program nor will fees be refunded on applications denied.

REVALIDATION:

Revalidation is due every four years based on the reassessment cycle.  The next general reassessment year for Warren County is 2023.    At that time, you will be requested to confirm the acreage and use of the property for the past four years and you will be requested to present any documentation and production.  A new land use application is filed at this time.   If you wish to present productions and schedules annually, you may do so.  There is no fee for revalidation.

WHAT IF THE USE OF MY LAND CHANGES?

If you make one or more of the following transactions, you MUST contact this office within sixty (60) days to discuss reapplication, fees, and possible roll-back tax.  These changes are:

1.       Change the use of the land
2.       Sell acreage
3.       Transfer acreage by deed of gift or receive by will
4.       Resurvey the property boundaries or vacate property lines
5.       Change ownership, buy out an owner, remove or add an owner or convey interest
6.       Rezoning (effective from date of zoning change rather than date of change in use)
7.       Erect a dwelling or trailer

Failure to contact this office within sixty (60) days after recording one or more of the above transactions WILL result in the parcel being disqualified from the Land Use Program  and taxed at full market value.

ROLL BACK TAXES:

If a landowner under Land Use Taxation makes one of the land use changes listed above, a roll back tax may incur since the tax dollars saved by being assessed under land use valuation is a DEFERMENT.  This rollback is applied on the deferred amount on the non-qualifying acreage for six (6) years including the current tax year or for the number of years the parcel has been in the land use program if less than five (5) years.  When less than five (5) acres are sold, there will be a roll back tax imposed on that tract for the number of acres not qualifying.  When a dwelling is built on qualifying land, there will be roll back tax on a one (1) acre homesite.  If you sell five (5) acres of qualifying land and the new owner builds a dwelling, the new owner will receive the roll back tax.  The owner changing the use from qualifying to non-qualifying receives the roll back tax.

REAL ESTATE TAXES:

The taxes on a parcel in Land Use must be paid timely.  If taxes become delinquent on a parcel under Land Use Assessment, that parcel will be removed from Land Use taxation and taxed at full market value.  If the parcel has not been taxed under Land Use, and application has been made on the parcel, taxes must not become delinquent.  If taxes are delinquent at the time application is to be processed, the application will not be processed.

Taxes should be lower under land use valuation.   Should a particular land use value be greater than the assessment value, only the assessment value would apply.

Land use values apply ONLY to the qualifying land.  All buildings and improvements are valued at the current general reassessment value.  One acre of each parcel having a dwelling, office, or other such building will be valued at the current reassessment value also.  This does not apply to acreage with farm buildings other than houses, commercial sites, or offices. 

Each real estate tax bill for property with land use will show the assessment, the use value, and the tax due.  The amount of change in assessment (deferment) can be calculated by subtracting the use value from the assessment. 

Useful Documents:

• Land Use Revalidation Form (Form LU-2)
• Affidavit for Application on the basis of Land Use Assessment
• Consulting Forester Providers for Forestry Land Use Plans

For questions concerning the Land Use Program please call (540) 635-2651 extension 205, fax (540) 636-8280 or click here to email Linda Fuller, Real Estate Assessor.