Does a shop or barn on a house lot add to a home's price?
No rule or public figure says what a detached shop or barn adds to a home's price. Three records decide how it is counted: whether it is a farm building under Virginia's definition or a structure under the building code with a permit history, the improvement value the assessment carries, and the appraisal a lender orders or an opinion of value, either of which values the whole property.
A workshop behind a house and a hay barn on a working farm, sorted by one definition
Set two buildings next to each other. One is a block workshop behind a house on a lot where nothing is farmed. The other is a pole barn full of hay on a farm that cuts and sells it. Both are outbuildings. Virginia law puts them under different rules, and a single definition does the sorting.
Va. Code 36-97 defines a farm building or structure as one "not used for residential purposes", located on property where farming operations take place, and used primarily for farm uses the statute lists, such as the storage, handling, production, display, sampling or sale of agricultural, horticultural, floricultural or silvicultural products produced on the farm. Va. Code 36-99 B then exempts farm buildings and structures from the Building Code.
| Test in Va. Code 36-97 | Workshop on a house lot with no farming | Hay barn on a working farm |
|---|---|---|
| Not used for residential purposes | Depends on the building | Depends on the building |
| On property where farming operations take place | No | Yes |
| Used primarily for a listed farm use | No | Storing hay produced on the farm is the kind of use the statute lists |
| Farm building exemption from the Building Code | Not available: the lot fails the farming test | Available if every test is met, subject to the exceptions below |
The exemption has limits even for a true farm building, among them a farm building run as a licensed restaurant, flood plain and mudslide rules, and safety requirements where the public is invited in for agritourism. Those limits, and how barns and outbuildings are handled on working farm ground, including the acreage under them, are covered in do barns and outbuildings add value. This page stays with the building on a house lot.
The permit file is the first thing a buyer can ask to see for a shop on a house lot
A shop that is not a farm building is not covered by the farm building exemption. That leaves it under the ordinary building code rules, and it gives a buyer's side something concrete to ask for: the permit history.
Which work needs a building permit, and which small projects are exempt, is a definition question the glossary takes up. What matters at a sale is simpler. A shop with a permit on file is a building whose history can be shown. A shop with no record leaves an open question for the buyer's side, and a seller who asks the county first knows the answer before anyone else asks it.
The county building official holds the permit file and answers whether a given structure needed a permit when it went up. Selling a house where some of the work never went through that process is its own subject, covered in what if my house has an unpermitted addition.
The assessment counts the building as improvement value, and that number is the county's
The second record is the tax assessment. Under Va. Code 58.1-3201, general reassessments and annual assessments of real estate are made at 100 percent fair market value, with an exception the section cross-references.
The value of what is built on a property can be counted apart from the ground. Virginia Cooperative Extension treats improvement value as what dwellings, buildings and other improvements are worth apart from the land itself, and its examples run from fences, barns and roads up to homes and commercial buildings. A shop or barn on a house lot belongs in that improvement column.
Whatever the assessment carries for the building is the county's number for tax purposes. It is not a sale price for the building and it is not an appraisal. How a specific shop is carried on the assessment, and whether it is broken out on the parcel record, is a question for the commissioner of the revenue or the assessor in that county.
A figure for the property, shop included, comes from an appraisal or an opinion of value
Neither the permit file nor the assessment is a price. The two documents that put a figure on the property, shop and all, are an appraisal and an opinion of value, and Virginia law keeps them apart.
When a buyer's lender needs an appraisal, it orders one from a licensed appraiser, and that appraisal values the whole property. Before that, a seller can get an opinion of value from a licensee. Under Va. Code 54.1-2010 A 1, that valuation "shall not be referred to as an appraisal".
That is why a broker price opinion or a licensee's valuation is a different document from an appraisal, and why a free valuation on this site is an opinion of value and not an appraisal.
Either way, the figure is only as good as the facts that go into it. SWVAR tells its MLS members that incorrect data can jeopardize the comparative market analyses and appraisals everyone relies on, which is a reason to describe a shop or barn in a listing as it actually is. How the acreage under a house changes its price, apart from any building on it, is taken up on selling your home.
Selling a home with a shop or barn out back?
Tell Lowell what the building is, how it is used and whether it was permitted. He will fold it into an opinion of value on the whole property; the lender's appraisal stays with a licensed appraiser. No cost, no obligation.
Got it. Thank you.
We'll be in touch shortly with an honest read.
Questions this raises
Does keeping a few animals make the barn behind my house a farm building?
Not automatically. Va. Code 36-97 requires the building to be on property where farming operations take place, used primarily for listed farm uses such as storing or handling agricultural products produced on the farm, and not used for residential purposes. Whether a small operation on a house lot meets that definition is a question for the county building official, who administers the building code there.
How should a shop or barn be described in the listing?
As it is. The SWVAR MLS limits its Public Remarks field to information that is descriptive of the listed property and relevant to portraying it accurately, and 18VAC135-20-190 B 3 requires a licensee's advertised property information to be consistent with the property's condition. So the listing says what the building is and how it is used, not a figure for what it adds. Permit and assessment questions go to the county before the description is written.
Does the county's assessment show what my shop is worth by itself?
General reassessments and annual assessments of real estate in Virginia are made at 100 percent fair market value under Va. Code 58.1-3201, with an exception the section cross-references, and improvement value is the value of buildings and other improvements separate from the land. Whether a particular county's parcel record breaks a shop out on its own line is a question for the commissioner of the revenue or assessor. Either way, an assessment is not a sale price and not an appraisal.
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 36-97, definitions (farm building or structure) Virginia General Assembly
- Va. Code 36-99, Uniform Statewide Building Code provisions and the farm building exemption Virginia General Assembly
- Va. Code 58.1-3201, assessments at fair market value Virginia General Assembly
- Va. Code 54.1-2010, exemptions from appraiser licensure Virginia General Assembly
- Agricultural Land Sales in Virginia, 2023 (AAEC-324) Virginia Cooperative Extension
- 18VAC135-20-190, advertising by licensees Virginia Real Estate Board
- MLS quick reference handout (accuracy of MLS data and Public Remarks) Southwest Virginia Association of REALTORS