Land Use Taxes

Most counties provide for a reduced real estate tax, called Land use tax, to provide tax breaks to real estate owners who have devoted their land to agricultural use, horticultural use, forest use and/or open space. Not all counties have land use taxation, so be sure to check with the county Commisioner of Revenue to find out the specifics of each particular county.

As a guideline, Albemarle County Virginia has the follwing criteria:

1. Agricultural Use: There must be a minimum of five acres and meet prescribed standards for production for sale of crops and/or livestock or be in an approved soil conservation program.

2. Horticulture Use: There must be a minimum of five-acres that are in the production of fruits, vegetables, or ornamental plants or products for sale.

3. Forest Use: There must be a minimum of 20 acres which includes standing timber and trees planted in such a manner to create a forest area.

4. Open Space: There must be at least 20 acres and be used to provide or preserve the land for park or recreational purposes, conservation of land or other natural resources, floodways, or historic or scenic purposes. To qualify the land must have a recorded perpetual conservation, historic, or open-space easement held by a public body such as the Virginia Outdoors Foundation or the Nature Conservancy.

If the property is not currently in land use, you will need to provide the county with the following documents. Once again, check with your county first to see if they require additional documentation.

1. The USDA/FSA farm number.

2. Federal Tax forms for Farm Expenses and Income or Farm Rental Income.

3. A Farm Management Conservation Plan or a Forest Management Plan.

4. Proof that the gross sales averaged more than $1,000. over the past three years.

5. Proof that the farm has been in agricultural use for the last five years.

IF YOU PURCHASE LAND THAT IS CURRENTLY IN LAND USE, MAKE SURE YOU HAVE THE SELLER SIGN THE NECESSARY FORMS AND FILE THEM IN ORDER THAT THE LAND USE TAXATION STAYS IN PLACE. If you lose the land use status, then you must start the process again, meaning that you pay normal real estate taxes during the five years while you re-establish the use.

Return to Things You Should Know before buying land.

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