A study of Loudoun’s local tax incentive programs to protect land from development has found that half of the land in the county is already protected by at least one local program and paying lower taxes.
The county has three local programs to protect land from development. In each, landowners pay taxes based on a use value assessment, which is often lower than the typical fair market value assessment—for example, a property is taxed based on its value as farmland, rather than its potential sale price if it were to be subdivided and sold for development.
According to Commissioner of the Revenue Robert S. Wertz Jr., 4,956 parcels in Loudoun comprising 159,560 acres qualify for lower tax assessments. Loudoun County has about 333,000 acres.
“These programs in Loudoun and elsewhere are used to promote agriculture and open space in the county,” Supervisor Geary M. Higgins (R-Catoctin) said. “They are a cost avoidance for the county. They are not a loss of revenue for the county.”
“If there were houses built on all of this farmland and open spaces, then we would have to spend a lot more money on schools, on roads, on all of the infrastructure that would be needed to provide services for those folks,” Supervisor Tony R. Buffington (R-Blue Ridge) said.
Chairwoman Phyllis J. Randall (D-At Large) took it a step further.
“I don’t think it’s just cost avoidance,” Randall said. “I think it’s revenue producing, because most of our—almost all of our—tourism tax dollars sit in western Loudoun County.”
The three programs can and do overlap.
The first, agricultural and forestal districts, protect land of 200 contiguous acres or more for four to 10 years. They also confer some protection from eminent domain—if the county or state sought to acquire that land, it must go through a special public review process. Loudoun has 23 agricultural and forestal districts, covering about 43,600 acres.
Another is the land use assessment program for qualifying agricultural, horticultural, forest and open space lands. It includes 2,835 parcels representing 78,950 acres. In the event a property in the land use taxation program is used for more intensive development, subdivided, or its owners fall behind on taxes, the county can collect five years of back taxes at the property’s full market value.
The county’s only program to permanently protect land from development is the conservation easement stewardship program. Some easements are required as a way of maintaining required open space in developments and are held by the county, but in the case of voluntary gift easements, there may also be state and federal tax benefits. There are about 750 conservation easements in Loudoun protecting more than 72,000 acres.
Buffington said those are “all good tools for the toolbox.” He also said it shows the importance of conservation easements.
“None of them are permanent except for the conservation easements, so the county can’t really make plans on something that’s temporary.”
He has proposed a program to help landowners pay for the up-front cost of putting land into conservation easements, a process he has said can be prohibitively expensive.
And Randall said as the county rewrites its comprehensive plan, she will ask the county staff members to study a transfer of development rights program. Typically those programs allow landowners to purchase development potential from each other—removing the possibility of development from one property, while increasing its allowable density on another.
Some county planning commissioners, who are working on the comprehensive plan, have opposed that idea, arguing it could funnel more density in eastern Loudoun.