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Welcome to the Virginia Department Of Forestry

Conservation Easements

Development Rights: Purchase

Introduction l Development Rights: Donation l Development Rights: Purchase l Easement Holder l Getting Started

Farmland Protection Program

Farmers who want to keep their land in agriculture for the long term may be able to utilize the Farmland Protection Program managed by the Natural Resources Conservation Service (NRCS). This program is only available in counties that allow the purchase of development rights. Farms must have prime, unique, or other productive soil, be privately owned, and large enough to sustain agricultural production.

The Farmland Protection Program reimburses the landowner, through the locality, for the easement value and does not cover legal or other costs. The easement value is the fair market value minus the agricultural value. Easement sale proceeds are treated like any other capital gain for federal, state or local income tax purposes. Some programs have provisions that allow for installment purchases or use securable tax-exempt bonds as a method of payment.

NRCS can purchase an easement on farmland that allows participating landowners to keep their land in agriculture, but not to convert the land for nonagricultural use. All enrolled lands must have a conservation plan developed by an NRCS Field Office. Priority is given to applications for perpetual easements, and a minimum of 30 years is required. This program is subject to annual congressional funding.

Forest Legacy Program

The Virginia Department of Forestry (VDOF), in cooperation with the USDA Forest Service, can purchase development rights on significant forestlands. The VDOF gives priority to land that can be effectively managed for sustainable timber production, important wildlife habitat, or for watershed protection. Long-term costs of easement administration and easement compliance monitoring are a cooperative effort between the VDOF and private nonprofit land trusts. All landowners must have a Forest Stewardship Plan approved by the VDOF.

Purchase Development Rights (PDR)

Under a PDR program, state or local government purchase development rights from landowners who would rather sell these rights than donate them. These rights can be retired permanently or for a set number of years.

Transferable Development Rights (TDR)

Transferable Development Rights programs recently became available in Virginia (See the Code of Virginia, Board may accept dedication of rights to develop real property). Under a TDR, development rights are separated from a parcel of land and sold to a private party, usually a developer, for use on another property. Rights are generally transferred to an urban region with a high demand for development.

The local government allows this transfer by designating a "sending area" and a "receiving area." The sending area is generally a rural region from which development rights will be "sent away". The receiving area is an urbanized region where those development rights are used. Local governments decide where development rights can be sent from and what areas can receive them.

Politically, a TDR program is difficult. Residents of the urban area where the development is top occur may object to "added density" in their neighborhood. The testament to the difficulty in creating a TDR program is the popularity of PDRs and the relatively sparse adoption of TDR programs nationwide. Elected officials and taxpayers would rather pay to purchase development rights and retire them, than to transfer them to communities that don't want development and will oppose the program.

The most obvious advantage of a TDR program is that the private sector, rather than tax dollars, is paying for preservation of the parcel from which the rights are purchased. The obvious disadvantage is that the number of new residential units in the locality is not decreased, just moved. From the perspective of long-term planning, it makes sense to transfer development rights to areas that are already well served by highways, water and sewer.

The flexibility of these programs makes them popular among landowners, and the retirement of development rights gives the greatest protection to the forest land base. However many landowners do not feel comfortable in making these decisions. Local governments often offer incentives and protection to landowners that can resist developing their property in the near future.

Special Use Valuation or Land Use taxation

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.

Agricultural Forestal Districts

Localities can create special districts of local significance to add an additional layer of protection against changes to current land use. Agricultural, Forestal, or Agricultural and Forestal Districts are a way for counties to encourage the use of land for agriculture or timber.

Lands in Agricultural and Forestal Districts have reduced taxes corresponding to land use rather than fair market value, and are allowed exceptions to laws that would restrict farming or forestry in the district.

Districts can only be initiated by landowners. Landowners agree to limit development of the property during the number of years the district is in effect (4 to 10 years). Landowners have the right to remove their land from the district during the review process with no penalty. Districts cannot have subdivision of less than 20 acres. A minimum of 200 acres is required in order to form a District, and only landowners can initiate the formation of Agricultural and Forestal Districts.

To create a district of local significance, a single landowner or group of landowners will decide together the most desirable way to use these lands for the community. This group of landowners then requests their county administrator or  planning commission to establish a district. This process varies slightly from county to county, but usually the planning commission and the Board of Supervisors hold public hearings before making a decision to establish a district.

Conservation Incentive Programs

This summary of "Cost-share" programs describes ways landowners and citizens can share the cost of conservation projects.

Additional information and resources

Last modified 2007-07-12