Related InformationThe following data show an increase in land use and the effect on taxes in Shenandoah and Warren counties, but a decrease in Frederick County. Data provided by the counties' commissioners of the revenue offices.
By Alex Bridges
Shenandoah County leaders could take action Tuesday that would protect a longstanding family farm from future development.
The Hawkins family proposes to put 313 acres of land on their Pleasantdale Farm near Woodstock into a conservation easement. The proposal has supporters in the community and among the Board of Supervisors who may consider the request at its regular meeting Tuesday night. The easement process in this case requires the county to leverage federal and state funds with $100,000 of local money.
But at their meeting earlier this month, the board heard comments from one person who showed that not everyone in the county supports the proposal. The Woodstock area resident questioned whether county taxpayers should subsidize land protection when owners already receive significant tax breaks for keeping property in agricultural use.
A local official and a state agency concur that certain long-established programs such as land-use assessment or agricultural and forestal districts don't guarantee the protection of farmland against development. Conservation easements do protect land from development in perpetuity, even with the sale of the property.
The conservation easement continues to gain steam and jurisdictions such as Shenandoah County have put money aside to help with the effort, though not all easements require leverage from local money.
County Planner Patrick Felling explained that both conservation easements and land-use assessment remain a voluntary option for owners.
Felling recently clarified and corrected some of the statements and pointed out that Pleasantdale Farm does not remain protected from development. The nine parcels proposed for the conservation easement lie within the Woodstock West Agricultural and Forestal District that expires in 2015, at which time landowners may renew their inclusion for another 10 years, Felling explained.
However, state law allows a certain number of residential dwellings on properties in an agricultural and forestal district. Pleasandale Farm could develop one house on each of the nine parcels, Felling said. Should the property fall out of the agricultural and forestal district in 2015, development would not be limited to just nine dwellings.
Information from the Virginia Department of Forestry indicates that land-use assessment may postpone but cannot permanently protect agricultural land from development. The department cited studies and papers that show not all eligible landowners are enrolled in land-use assessment nor is the practice available in all jurisdictions, including those with a more rural landscape.
The Piedmont Environmental Council studied counties in the region and found that for each dollar in tax revenue collected from farm land and open space, the county spent 11 cents to 21 cents on services for that property. By comparison, the council found, for each dollar received from residential land the county spent $1.16 to $1.39 to provide services for that property.
Shenandoah County Commissioner of Revenue Kathy Black acknowledged the land-use assessment program affords a major tax break to participants. The program puts requirements on the landowners. Likewise, the owners don't receive a tax break on their homes or other structures on the property in land use, Black explained.
"It's a huge break on your taxes if you qualify for the land use program," Black said.
Shenandoah County applies different values on land depending on the use of the property. Land used as pasture has a value of $230 per acre compared to the fair-market assessment of $7,000-$10,000.
Land used for crops carries a value of $410 per acre while the county uses $190 per acre for orchards. The county applies different values on land used to harvest grapes or to plant Christmas trees.
But land use comes with a few tight strings.
"Land use is a lien against your property so when you get the land-use break you've committed to an agricultural type of use on your property," Black explained.
That commitment may include a required number of livestock or other animals per acre and a certain amount of income. The owner must have a five-year history of the land being used for agricultural purposes before the property can qualify for land-use assessment.
If a property owner defaults on, or changes the use of the land, or falls below the required acres, then the county can seek a rollback - the difference between the taxes at the land-use value and the fair-market value, plus interest, for the current year and previous five years.
Black said the county requires farmers to submit the farm income schedules to the Internal Revenue Service each year.
The Commissioner's Office also requires landowners to file documents each year to verify the use of the land and their income. Black noted that one person in her office oversees the land-use program. The employee flags properties in the filings for further investigation, Black said. She then spends the summer months making spot inspections of properties to see if the owner complies with the land-use requirements.
"So there's lots of requirements to go with the program," Black said. "It's a big program but it's a huge break and the idea is that ... when you have agricultural property it doesn't require as many services as residential property."
Property owners with acreage in land use pay the same tax rate as other homeowners. But by reducing the value of the property in land use the owner receives a break.
Without the land-use program, municipalities could collect tax revenue on all properties assessed at the fair-market values.
However, supporters of the program say a lower value on agricultural land keeps farming costs low. Likewise, the discounted values may mean lower land prices and an added incentive for someone to buy and run a farm.
Black acknowledged that some people who support conservation easement efforts believe the fair market value of such property should fall under the land use assessment. But Black noted that others hold the opposite view - that property put in a conservation easement actually increases the fair market value because some people may desire that kind of land.
"How do you know until the property is sold and probably someone who has it in a conservation-type easement intends to keep it in the family," Black said.
Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or firstname.lastname@example.org