Letters have been sent notifying landowners in Agriculture and Agricultural Forestal Districts that tax rates will be raised by as much as 30%. According to the County, there is some concern that the State Land Evaluation Advisory Council (SLEAC) rate has been low at $2,200, and is due for a rate hike. While this may be true, the SLEAC is not scheduled to meet until the first two weeks of August, with a final determination of rates later in September. The Northampton rate hike at this time appears to be premature, given assessments have fallen by close 20%.
Virginia law allows for eligible land in agricultural, horticultural, forest, or open space use to be taxed at the value in use (use value) as opposed to its market value. The SLEAC was created in 1973 to estimate the use value of eligible land for each jurisdiction participating in the use-value taxation program, estimating the use value of land in agricultural, horticultural, forest, and open space use.
According to Northampton County Commissioner of Revenue Charlene Gray, land values for AG in an AFD are projected to rise (at least the values set by the SLEAC), leaving the county little choice but to raise taxes on those parcels.
However, the SLEAC rates are not mandatory, but recommended rates. Beginning in August, the SLEAC recommendation is the product of significant work and effort by highly qualified AG and market sources in the state. Article 4 Chapter 32 of Virginia Code (See Special Assessment for Land Preservation here), which contains the laws pertaining to administration of real estate under use-value ordinance, notes that in our case, the Commissioner of Revenue does appear to be authorized to change policy or apply rates that unfairly distribute the tax burden on County citizens. Reading, Virginia Code §58.1-3236 defines how the Commissioner “shall consider only those indicia of value which such real estate has for agricultural, horticultural, forest or open space use, and real estate taxes for such jurisdiction shall be extended upon the value so determined. In addition to use of his personal knowledge, judgment and experience as to the value of real estate in agricultural, horticultural, forest or open space use, he shall, in arriving at the value of such land, consider available evidence of agricultural, horticultural, forest or open space capability, and the recommendations of value of such real estate as made by the State Land Evaluation Advisory Council.”
While the ‘Courtesy Letter’ notifying Northampton Farmers of the coming rate increase may have come from the blind side for most, it is not readily apparent that the Board of Supervisors was aware of the rate hikes either. Oddly, it is generally the purview of the BoS to approve new tax rates; it seems highly irregular that office of the Commissioner of Revenue would be doing so at this time.
Note: It is not unusual to set low tax rates to keep farmers farming,but to also create a more conducive environment for young farmers to enter the market. On the flip side, raising rates can make it harder for farmers to survive, and in places like Northern Virginia, Pennsylvania and Upstate New York, it has forced the sale of farmland which may have provided space for future development projects.
About the Author
Although woods land is assessed at a lower rate, the SLEAC value for open land has gone from $2,200.00 to $3,300.00 per acre. Isn’t that a greater than 30% increase?