Virginia Beach implements cap on agricultural land valuation

A soybean field in Pungo. The city may consider a cap on land use tax rates on agricultural land. [John-Henry Doucette/The Princess Anne Independent News]
A soybean field in Pungo. The city will cap land use tax rates for agricultural land. [File photo/The Princess Anne Independent News]

COURTHOUSE Virginia Beach will impose a ceiling upon land use tax values for agricultural land of either $1,800 per acre or a commodity-determined value, if it is lower than that sum.

The value that determines taxes paid for some agricultural land has risen sharply due to a spike in commodities prices that establish the value used to determine tax bills.

Between 2007 and 2016, it rose from $360 of valuation per acre to $2,120 for class III agriculture land, for example. It is expected to be $1,970 for 2017.

“It’s an abnormality,” said City Councilmember Barbara Henley, a farmer who represents the Princess Anne District, of the spike in commodity prices that came and went, though its effect on valuation lingers.

The change was discussed during a meeting this past month.

Agriculture Director David Trimmer and Real Estate Assessor Jerry Banagan briefed the city council. The Independent News first reported the likely change after the city agricultural commission agreed to support a cap recommended by Virginia Beach Farm Bureau.

Trimmer said the cap would provide stability for local farmers and had support in the farming community. 

Banagan said the proposed cap is based upon a value per acre used for the agricultural reserve program.

Henley noted that this step should not be confused with that preservation program, which pays landowners for development rights. It deals with valuation of farmland in general, she said during the meeting.

City Councilmember John Moss, who serves at large, expressed concern that employing a cap meant an inconsistent approach to taxation.

“We are insulating one segment from market fluctuation,” he said.

The change did not require a vote by the council, and Banagan would use the valuation change going forward. It expected to cause a $73,200 tax reduction, according to the report by Trimmer and Banagan.

City Manager Dave Hansen said the assessor sets the valuation rate. It has been based upon the numbers provided from the state, which are based upon commodity prices.

“I’m not going to object to it,” Mayor Will Sessoms said regarding the change.

© 2016 Pungo Publishing Co., LLC

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