2006 Code of Virginia § 58.1-3237 - Change in use or zoning of real estate assessed under ordinance; roll-back taxes

58.1-3237. Change in use or zoning of real estate assessed under ordinance;roll-back taxes.

A. When real estate qualifies for assessment and taxation on the basis of useunder an ordinance adopted pursuant to this article, and the use by which itqualified changes to a nonqualifying use, or the zoning of the real estate ischanged to a more intensive use at the request of the owner or his agent, itshall be subject to additional taxes, hereinafter referred to as roll-backtaxes. Such additional taxes shall only be assessed against that portion ofsuch real estate which no longer qualifies for assessment and taxation on thebasis of use or zoning. Liability for roll-back taxes shall attach and bepaid to the treasurer only if the amount of tax due exceeds ten dollars.

B. In localities which have not adopted a sliding scale ordinance, theroll-back tax shall be equal to the sum of the deferred tax for each of thefive most recent complete tax years including simple interest on suchroll-back taxes at a rate set by the governing body, no greater than the rateapplicable to delinquent taxes in such locality pursuant to 58.1-3916 foreach of the tax years. The deferred tax for each year shall be equal to thedifference between the tax levied and the tax that would have been leviedbased on the fair market value assessment of the real estate for that year.In addition the taxes for the current year shall be extended on the basis offair market value which may be accomplished by means of a supplementalassessment based upon the difference between the use value and the fairmarket value.

C. In localities which have adopted a sliding scale ordinance, the roll-backtax shall be equal to the sum of the deferred tax from the effective date ofthe written agreement including simple interest on such roll-back taxes at arate set by the governing body, which shall not be greater than the rateapplicable to delinquent taxes in such locality pursuant to 58.1-3916, foreach of the tax years. The deferred tax for each year shall be equal to thedifference between the tax levied and the tax that would have been leviedbased on the fair market value assessment of the real estate for that yearand based on the highest tax rate applicable to the real estate for thatyear, had it not been subject to special assessment. In addition the taxesfor the current year shall be extended on the basis of fair market valuewhich may be accomplished by means of a supplemental assessment based uponthe difference between the use value and the fair market value and based onthe highest tax rate applicable to the real estate for that year.

D. Liability to the roll-back taxes shall attach when a change in use occurs,or a change in zoning of the real estate to a more intensive use at therequest of the owner or his agent occurs. Liability to the roll-back taxesshall not attach when a change in ownership of the title takes place if thenew owner does not rezone the real estate to a more intensive use andcontinues the real estate in the use for which it is classified under theconditions prescribed in this article and in the ordinance. The owner of anyreal estate which has been zoned to more intensive use at the request of theowner or his agent as provided in subsection E, or otherwise subject to orliable for roll-back taxes, shall, within sixty days following such change inuse or zoning, report such change to the commissioner of the revenue or otherassessing officer on such forms as may be prescribed. The commissioner shallforthwith determine and assess the roll-back tax, which shall be assessedagainst and paid by the owner of the property at the time the change in usewhich no longer qualifies occurs, or at the time of the zoning of the realestate to a more intensive use at the request of the owner or his agentoccurs, and shall be paid to the treasurer within thirty days of theassessment. If the amount due is not paid by the due date, the treasurershall impose a penalty and interest on the amount of the roll-back tax,including interest for prior years. Such penalty and interest shall beimposed in accordance with 58.1-3915 and 58.1-3916.

E. Real property zoned to a more intensive use, at the request of the owneror his agent, shall be subject to and liable for the roll-back tax at thetime such zoning is changed. The roll-back tax shall be levied and collectedfrom the owner of the real estate in accordance with subsection D. Realproperty zoned to a more intensive use before July 1, 1988, at the request ofthe owner or his agent, shall be subject to and liable for the roll-back taxat the time the qualifying use is changed to a nonqualifying use. Realproperty zoned to a more intensive use at the request of the owner or hisagent after July 1, 1988, shall be subject to and liable for the roll-backtax at the time of such zoning. Said roll-back tax, plus interest calculatedin accordance with subsection B, shall be levied and collected at the timesuch property was rezoned. For property rezoned after July 1, 1988, butbefore July 1, 1992, no penalties or interest, except as provided insubsection B, shall be assessed, provided the said roll-back tax is paid onor before October 1, 1992. No real property rezoned to a more intensive useat the request of the owner or his agent shall be eligible for taxation andassessment under this article, provided that these provisions shall not beapplicable to any rezoning which is required for the establishment,continuation, or expansion of a qualifying use. If the property issubsequently rezoned to agricultural, horticultural, or open space, it shallbe eligible for consideration for assessment and taxation under this articleonly after three years have passed since the rezoning was effective.

However, the owner of any real property that qualified for assessment andtaxation on the basis of use, and whose real property was rezoned to a moreintensive use at the owner's request prior to 1980, may be eligible fortaxation and assessment under this article provided the owner applies forrezoning to agricultural, horticultural, open-space or forest use. The realproperty shall be eligible for assessment and taxation on the basis of thequalifying use for the tax year following the effective date of the rezoning.If any such real property is subsequently rezoned to a more intensive use atthe owner's request, within five years from the date the property wasinitially rezoned to a qualifying use under this section, the owner shall beliable for roll-back taxes when the property is rezoned to a more intensiveuse. Additionally, the owner shall be subject to a penalty equal to fiftypercent of the roll-back taxes due as determined under subsection B of thissection.

F. If real estate annexed by a city and granted use value assessment andtaxation becomes subject to roll-back taxes, and such real estate likewisehas been granted use value assessment and taxation by the county prior toannexation, the city shall collect roll-back taxes and interest for themaximum period allowed under this section and shall return to the county ashare of such taxes and interest proportionate to the amount of such period,if any, for which the real estate was situated in the county.

(Code 1950, 58-769.10; 1971, Ex. Sess., c. 172; 1973, c. 209; 1974, c. 34;1977, c. 323; 1979, c. 179; 1980, c. 363; 1984, cc. 92, 222, 675, 676, 681;1985, c. 478; 1988, cc. 422, 695; 1990, c. 841; 1992, Sp. Sess., c. 3; 1998,c. 274; 1999, c. 1026.)