Can I sell a farm that is in the land use program?
Yes. Land use taxation follows the farming rather than the owner, so a farm can keep its use value assessment after a sale if the buyer keeps it in bona fide production for sale under the state standards, keeps the taxes paid and does not rezone it to a more intensive use. The farmhouse and its site sit outside the use value area and are assessed like other real estate.
The house site on one side of the line, the fields, barns and ponds on the other
Start at the farmhouse, because that is where the assessing officer's line starts. The land under the home, and the land actually used with it, is left out of the area assessed on its use, and it is valued "by the same standards, methods and procedures as other taxable structures and other real estate in the locality". The house sells with the farm, but only the land beyond that line has a use value for a sale to carry over.
Walk out from the yard and the Code counts almost everything that serves the farming. The area devoted to the qualifying use includes the land under barns, sheds, silos, cribs, greenhouses and like structures, and it includes lakes, dams, ponds, streams and irrigation ditches. The tillable fields and the pasture are the use itself, as long as they are in production for sale.
| Part of the farm | In the use value area? | How it is valued |
|---|---|---|
| The farmhouse, and the land under and used with it | No | Like other real estate in the locality |
| Any other structure not related to the farm use | No | Like other real estate in the locality |
| Fields and pasture in bona fide production for sale | Yes | On its value for that use |
| Land under barns, sheds, silos, cribs and greenhouses | Yes | Counted as part of the area devoted to the use |
| Ponds, dams, streams and irrigation ditches | Yes | Counted as part of the area devoted to the use |
How the number on the use value side is set is a separate subject, under use value assessment in the glossary.
Production for sale, measured against the county's own yields
A buyer who wants the classification to stay has to keep the farm doing what qualified it: bona fide production for sale, measured against standards the Commissioner of Agriculture and Consumer Services prescribes in 2VAC5-20.
- Field crops. Production is primarily for commercial uses, and the average yield per acre on each crop must equal at least one-half of the county (city) average for the past three years, though a local government may prescribe less when unusual circumstances make that unrealistic.
- Livestock, dairy and poultry. The regulation calls for "a minimum of 12 animal unit-months of commercial livestock or poultry per five acres of open land in the previous year."
Counties add their own plain statements of where the line falls. Pulaski County's FAQ answers whether a family owned farm with no sales qualifies with a single word: no. Wythe County requires applicants to certify the income earned from agricultural and horticultural use, and says boarding, training and breeding of horses may qualify while horses for the owner's personal use do not. Montgomery County's page words the crop yield test differently from the regulation, so a Montgomery farm's test is its Commissioner of Revenue's to state.
Whether a particular buyer's operation meets these standards is decided by the Commissioner of the Revenue, not by the seller, the buyer or the listing agent. A small place kept mostly for enjoyment raises a different question, covered in what counts as a hobby farm.
Why a farm's classification can outlast the deed
The Code ties continuation in the program to the land, not the name on the deed. Staying in depends on continued qualifying use, continued payment of taxes and compliance with the article and the ordinance, and not on the land staying with the same owner.
A change in ownership, on its own, does not attach roll-back if the new owner does not rezone the real estate to a more intensive use and keeps it in the use for which it is classified, unless a subsection G ordinance provides otherwise. What does attach it is a change to a nonqualifying use, or a rezoning to a more intensive use at the request of the owner or his agent, and rollback taxes then fall on the part that changed. The full list of events is in what triggers rollback taxes.
An application must be submitted whenever the use or acreage of approved land changes; whether a county wants a fresh one from a new owner who changes neither is its Commissioner of the Revenue's call.
Selling a farm to a buyer who keeps farming it is the simplest case. Carving lots off the land, or selling to a buyer who builds, is set out sale type by sale type in selling land that is in land use.
When one corner of the farm changes and the rest keeps producing
A farm does not always change all at once. A barn gets another use, a second house goes up, or the owner keeps the homeplace back from the sale, and each of those touches only part of the land.
A portion used for something else
A portion put to a different use under a special use permit, or as zoning otherwise allows, does not by itself cost the rest of the farm its agricultural designation if the rest still meets every requirement; that exception sits among the look-alikes on the triggers page linked above.A house built on qualifying land
Montgomery County asks for notice within 60 days of a change in use, including building an additional house on land in the program. That is Montgomery's own statement; another county's Commissioner of the Revenue sets out how it treats a new house.A piece divided off
Carving a lot off the farm is its own tax question, whether the piece keeps a qualifying use and acreage or goes to a buyer who builds, and it is taken sale type by sale type on the page about selling land in land use linked above.Montgomery County also says that failing to report and pay roll-back within 60 days of a change in use makes the owner liable for an additional penalty of 10 percent of the roll-back tax and interest. That is Montgomery's rule as its page states it, not a figure for every county. Keeping the farmhouse and its lot while the land sells is a division question of its own, covered in selling the farm and keeping the house.
What to have answered before a farm in the program goes on the market
A buyer who intends to keep farming will ask what the classification requires of them. Most of those answers come from one office, and a few come from the contract.
| The question | Who answers it |
|---|---|
| Whether the buyer's operation meets the state production standards | The county's Commissioner of the Revenue; in Carroll County, (276) 730-3080 |
| Whether the county wants an application or other filing from the new owner | The Commissioner of the Revenue |
| What part of the farm is carried at use value today, and what is not | The Commissioner of the Revenue, from the land book |
| Hay, crops, equipment and livestock at closing | The purchase contract |
Whether to sell the farm whole or in pieces is taken up on selling your farm. Applying, revalidating and how roll-back is computed are covered in the land use program explained.
Selling a working farm to a buyer who will keep farming it?
Send the county, the acreage and what the farm produces now. Lowell will look over the fields, the barns and the water as a working farm, while the classification stays the Commissioner of the Revenue's decision. No cost, no obligation.
Got it. Thank you.
We'll be in touch shortly with an honest read.
Questions this raises
Do a farm's woods count toward its agricultural use?
Only in a narrow case. Under the state standards, tree or timber production counts toward agricultural use only where the real estate is less than 20 acres, meets the State Forester's technical standards and produces timber incidental to other farm operations. Woods outside that case are measured under the separate forest use class, which needs at least 20 acres and tree growth that meets the State Forester's standards, and which applies only where the local ordinance covers forest use or the land is in production inside an agricultural or forestal district. Carroll County's program includes forest use at 20 acres; Wythe and Floyd counties' programs cover agricultural and horticultural use only.
Can a farm with barns and a pond but no current sales stay in the program?
The barns and the pond count toward the area of the use, but they do not make the use. Agricultural use means bona fide production for sale of plants and animals, or land meeting the requirements for payments under a qualifying soil and water conservation program. Pulaski County's FAQ says a family owned farm with no sales does not qualify. Whether a given farm still qualifies is the Commissioner of the Revenue's decision.
Where this page's facts come from
Every rule, office and figure above traces to one of these. Rules change; check the office before you act on one.
- Va. Code 58.1-3230, special classifications of real estate, and use under a special use permit Virginia General Assembly
- Va. Code 58.1-3233, minimum acreage Virginia General Assembly
- Va. Code 58.1-3234, continuation not dependent on the same owner Virginia General Assembly
- Va. Code 58.1-3236, the farmhouse site and the area devoted to the use Virginia General Assembly
- Va. Code 58.1-3237, roll-back taxes Virginia General Assembly
- Va. Code 58.1-3241, separation of lots and split-offs Virginia General Assembly
- 2VAC5-20, including 2VAC5-20-20 and 2VAC5-20-30, standards for classifying real estate as devoted to agricultural use Virginia Administrative Code
- Frequently asked questions: land use assessment Wythe County, Virginia
- Land Use Value FAQ (PDF) Pulaski County, Virginia
- Commissioner of Revenue: land use information Montgomery County, Virginia
- Commissioner of the Revenue Floyd County, Virginia
- Commissioner of the Revenue: Special Assessment Land Program Carroll County, Virginia