Land Use Taxation or Special Use Valuation

Property is taxed based on the productive value of the land rather than at the highest and best use value of the land. Under this program, the landowner is recognized for and taxed based on the current rural use of the land rather than the development potential of the land.

Use-value taxation is a relatively weak conservation tool because it requires only a one-year commitment from the landowner. However, the reduced taxes paid by the landowner represent an incentive to maintain his or her land in forest.

The Commissioner of Revenue uses the recommendations of the State Land Advisory Council production value of the land when calculating the real estate tax obligation of the landowner. The locality may take an individual property out of land use when a landowner changes the use of the property (harvest timber with no provision to reforest, or if a landowner is causing pollution by not following accepted best management practices or if the property is being developed). Likewise, landowners may elect at any time to remove the property from “land use” to take advantage of a demand for development property.

Land Use Valuation taxes the land based on use instead of fair market value. Property taxes are then based on productivity, which results in substantially lower real estate taxes. Localities in Virginia can elect to reduce the real estate tax burden on unimproved land through this change in valuation. The Commissioner of Revenue determines if the property is suitable for this valuation. The commissioner calculates the landowner's property tax obligation using recommendations of the State Land Evaluation Advisory Council (SLEAC) to determine the production value of the land.

Landowners may elect at any time to remove their property from land use assessment. However, a landowner gives up their favored tax status if they change the land use, pollute, or plan to develop the property.

Last modified: Thursday, 06-Nov-2014 10:24:54 EST