County gives up millions in taxes to protect land

WOODSTOCK – Shenandoah County passed up $3.5 million in tax revenue this year to promote agriculture.

Commissioner of the Revenue Kathy Black gave a presentation to the Board of Supervisors on Tuesday about the county’s land-use taxation program. Property owners receive a break on their real estate taxes by way of reduced assessments on land used for agriculture, horticulture, forests or open space. Owners must abide by strict guidelines in order to keep the special assessment or risk having to pay back taxes they saved.

Approximately 12 percent of the real estate in the county is in the land-use taxation program, Black said. The county deferred $3.49 million in tax revenue this year through the program.

At the same time, the county’s Comprehensive Plan cites the importance of agriculture. Supporters say agriculture and open space requires fewer public resources than residential or commercial development and thus costs less to the county.

The Virginia General Assembly enacted a law in 1971 that allows localities to adopt a program of special assessments on land used for agriculture and horticulture as well as forest and open space. The county set up its program in 1979 but has not adopted an open-space agreement.

The county requires a minimum of 5 acres for land use in agriculture or horticulture, and real estate sought for qualification must have been devoted for at least five consecutive years to the production for sale of plants or animals, or to the production for sale of plant or animal products or other qualifying use.

Land in the program is assessed at a lower value than other property in the county, reducing the taxes owed on the parcels. Land use does not apply to residences on the property. Owners of parcels removed from the program must pay five years in rollback taxes – the difference between the tax levied and the amount that the county would have billed based on fair market value.

The county requires property owners to file a separate application for each parcel or tract shown on the land book. Owners must submit applications whenever the land use or amount of acres changes, and all owners and renters, if any, must sign the application. Applicants must file by the deadline or risk removal from the program.

The commissioner of revenue or the local assessing officer may require the applicant to provide documentation such as the assigned U.S. Department of Agriculture Farm Service Agency farm number and evidence of participation in a federal farm program; federal tax forms; a conservation farm management plan prepared by a professional; or gross sales averaging more than $1,000 annually over the previous three years.

The commissioner requires a fee with each application of $10 per parcel for 50 acres or fewer, or 20 cents per acre for more than 50 acres. Other neighboring counties charge different application fees. Neither Rockingham County nor Warren County charges a late fee.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or abridges@nvdaily.com