YOU issue: Ag tax break

Photo Robert LLewellyn Photo Robert LLewellyn

Here’s what readers asked for:

Each year Albemarle County forgoes about $20,000,000 in taxes on land use parcels, but the exact figure is not known to the public since the amount is not carried as a line item in the budget and there is no public discussion as far as I can determine.—Harold Timmeny

Land use is one of the  more arcane topics about which readers inquired. (Next up: revenue sharing!) Officially called Use Value Taxation, land use is an incentive to rural property owners to use their land for agricultural purposes rather than subdivisions. Albemarle adopted land use in 1973, and the program periodically draws criticism that it doesn’t thwart growth and is a tax break for the rich.

Currently 4,600 parcels in the county are taxed under the considerably lower land use rate rather than market rate, according to county assessor Peter Lynch. To qualify, a property owner must have five acres in agricultural use or at least 20 acres as forest.

He gives an example: Say the market value of a rural parcel in the county is $544,400. Under land use, if at least five acres of that property is producing an agricultural product, like hay, the parcel is valued at $21,100 and the owner pays taxes of $177 a year rather than $4,567 if it were assessed at market value.

It adds up to a differential of over $1.5 billion between market and land use value in Albemarle in 2018, says Lynch. That means the county deferred over $13 million last year in property tax revenue.

The $13 million the county forgoes in revenue is not a line item in the budget because the program is already established by state law and county ordinance. “It’s already a requirement,” says Lynch. “It’s not something to vote on in the budget.”

The rate Albemarle uses to determine land use values comes from the State Land Evaluation and Advisory Council, which establishes values specifically for Albemarle, says Lynch.

Land use, he says, “is a choice for the county to preserve rural areas.”

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