This year’s General Assembly session had quite a few delayed enactment bills. House Bill 1358 is one of them. HB1358 adds a new disclosure for rollback taxes to the Buyer Beware form that you use in your daily practice. The Buyer Beware form will have this new addition beginning on January 1, 2027: 

19. The owner makes no representations or warranties with respect to whether the property is located in a locality that has adopted a land-use plan that may provide use value assessment and taxation for real estate classified in § 58.1-3230. When real estate, or a parcel of such real estate, qualifies for special assessment and taxation on the basis of use, and the use or zoning of the real estate changes to a nonqualifying use or zoning, the real estate may be subject to roll-back taxes and interest pursuant to § 58.1-3237. Purchasers are advised to exercise whatever due diligence a particular purchaser deems necessary to determine whether the property may be subject to roll-back taxes and interest including contacting the commissioner of the revenue or duly appointed assessor in the locality regarding qualification for taxation on the basis of a use assessment and the liability for additional taxes and penalties that may attach if a change in use occurs.

So, what does this mean for you?  

This adds another notice for you and your client to investigate whether rollback taxes apply. If they do apply, then you need to ensure that your client is aware of the possibility of a tax bill if the land use changes and when the tax bill comes.  

Here’s a high-level example: a property that is classified as real estate devoted to agricultural use will not apply for this use after the sale, meaning your client will get a tax bill. It is important to understand why, how, and when.  

You should not wait until January 1, 2027, to begin advising your clients about rollback taxes. This notice, like the others in the Buyer Beware form, are advisories for you and your client to watch for. If a property your buyer is looking at has a special tax classification, then you need to make sure you and your client both understand what this means and what can or will happen.