If you're a landowner participating in your locality’s Land Use Assessment Program, you're likely enjoying the benefit of reduced property taxes based on your land’s use value rather than its full market value. The program is designed to encourage the preservation of agricultural, forest, horticultural, and open space land — a benefit to both landowners and the public. The tax assessment webpage for the property will indicate whether it is enrolled in the Land Use Assessment Program, and you can always call the assessor’s office to confirm.
However, it’s important to understand that these tax savings are not permanent; they are deferred. If the use of your land changes, or if certain eligibility criteria are no longer met, you may become responsible for what's known as roll-back taxes — and they can add up quickly.
What Are Roll-Back Taxes?
Roll-back taxes are the difference between what you paid in property taxes under the land use value and what you would have paid based on the fair market value — for up to six total years. On top of that, simple interest is added to the amount due. For specific roll-back tax rates, you’ll need to contact your county for the exact amount.
The purpose of the roll-back tax is to recapture the tax savings granted while the land was in qualified use if that use changes. It’s a safeguard to ensure that the Program supports long-term land conservation, not just short-term tax reductions.
When Are Roll-Back Taxes Triggered?
You could be subject to roll-back taxes if:
- The land is converted to a non-qualifying use (e.g., development or commercial use).
- You sell or transfer a portion of the property that reduces the acreage below the minimum required to remain eligible.
- The land no longer meets the qualifying criteria for agricultural, horticultural, forest, or open space classification.
- Delinquent taxes are owed as of June 1 for the prior year.
It’s important to note that while you can withdraw your property from the Land Use Assessment Program at any time without a required immediate penalty, the property remains subject to roll-back taxes for up to six years following the change in use or acreage. The actual timing of the roll-back tax bill will depend upon the county.
Key Points for Landowners
Always pay property taxes on time. If taxes are delinquent as of June 1 for the previous year, the parcel will be removed from the program and taxed at full market value.
Consult your county’s real estate assessor before making any changes to your land, its use, or selling a portion of your property.
Key Points for Realtors®
Remember, the tax assessment webpage for the property will indicate whether it is enrolled in the Land Use Assessment Program, and you can always call the assessor’s office to confirm.
The NVAR sales contract states:
“In the event Property is currently enrolled in a land use assessment program pursuant to Code of Virginia Code - Article 4. Special Assessment for Land Preservation and if, by the actions of Seller, Property is deemed unqualified for such program, Seller will be liable for the rollback taxes. Seller will not be liable for the payment of rollback taxes at or after Settlement if (i) Buyer fails to continue Property in the program, and/or (ii) within the timeframe(s) required by the local regulatory authority, Buyer fails to timely renew or revalidate Property in the program.”
Be sure to confirm if either the seller has taken the property out of land use recently and/or if the buyer does plan to take it out of land use. Let the settlement agent know so they can calculate the roll-back taxes for settlement.
Resources
As a Realtor®, you are not expected to be an expert on taxes or zoning law. If your client has questions about land use assessment programs and whether rollback taxes apply to them, direct them to local resources, such as:
- Loudoun County:
- City of Fredericksburg:
- Prince William County: Use Value Assessments Program
- Stafford County: Stafford Land Use Assessments Program
- Shenandoah County: FAQs • Land Use Assessment
- Virginia, generally:
Mason Dalman is a settlement attorney and branch manager at RGS Title in Warrenton, Virginia.
If you have any additional questions, please contact the NVAR Legal Hotline.