                                 CODE OF VIRGINIA

TAXATION (§ 10.1-1011)

A. Where an easement held pursuant to this chapter or the Open-Space Land Act
(&#xA7; 10.1-1700 et seq.) by its terms is perpetual, neither the interest of
the holder of a conservation easement nor a third-party right of enforcement of
such an easement shall be subject to state or local taxation nor shall the owner
of the fee be taxed for the interest of the holder of the easement.

B. Assessments of the fee interest in land that is subject to a perpetual
conservation easement held pursuant to this chapter or the Open-Space Land Act
(&#xA7; 10.1-1700 et seq.) shall reflect the reduction in the fair market value
of the land that results from the inability of the owner of the fee to use such
property for uses terminated by the easement. To ensure that the owner of the
fee is not taxed on the value of the interest of the holder of the easement, the
fair market value of such land (i) shall be based only on uses of the land that
are permitted under the terms of the easement and (ii) shall not include any
value attributable to the uses or potential uses of the land that have been
terminated by the easement.

C. Notwithstanding the provisions of subsection B, land which is (i) subject to
a perpetual conservation easement held pursuant to this chapter or the
Open-Space Land Act (&#xA7; 10.1-1700 et seq.), (ii) devoted to open-space use
as defined in &#xA7; 58.1-3230, and (iii) in any county, city or town which has
provided for land use assessment and taxation of any class of land within its
jurisdiction pursuant to &#xA7; 58.1-3231 or &#xA7; 58.1-3232, shall be assessed
and taxed at the use value for open space, if the land otherwise qualifies for
such assessment at the time the easement is dedicated. If an easement is in
existence at the time the locality enacts land use assessment, the easement
shall qualify for such assessment. Once the land with the easement qualifies for
land use assessment, it shall continue to qualify so long as the locality has
land use assessment.

HISTORY: 1988, cc. 720, 891; 1993, c. 390; 1998, c. 487.