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The Virginia Land Preservation Tax Credit (LPTC) is a valuable incentive benefiting not only landowners who permanently conserve property but also non-landowners who can purchase and use those credits to lower their Virginia state income tax.
Created by the Virginia General Assembly in 1999, the LPTC provides a 40% state income tax credit to landowners who donate a qualified conservation easement. These easements protect wildlife habitats, farmland, and scenic landscapes for public benefit.
Because the credit became transferable in 2002, non-landowners may also benefit. Landowners who cannot use all their credits can sell them to Virginia taxpayers, who may then apply the credits dollar-for-dollar against their Virginia income-tax liability.
Example: If you owe $20,000 in Virginia income tax, you might purchase $20,000 of credits at ~$0.88 per $1 of value, paying ~$17,600 and saving ~$2,400 in tax. The difference between what you paid and the tax value used may later be taxable as income (it’s important to consult your Wendroff CPA tax advisor on timing and character of the gain).
Since its inception, the program has supported meaningful land protection. According to Virginia Department of Taxation records, about 1.068 million acres had been preserved via LPTC-qualified easements as of 2023, making it one of the most productive state tax-credit conservation programs in the U.S.
Because the LPTC transfer process involves appraisal reviews, registration, and legal documentation, buyers should work with an experienced CPA and a qualified credit brokerage. A valid, state-approved appraisal is required; credits valued at $1 million or more must undergo additional review by the Virginia Department of Conservation & Recreation.
The purchase price of credits typically fluctuates throughout the year; recent transactions have ranged from ~$0.88 to ~$0.91 per $1 of credit value, so purchasing early can help secure favorable pricing before the statewide cap is reached.
Buying Virginia Land Preservation Tax Credits may make sense if you expect a significant Virginia state tax bill, such as after:
This strategy is also well-suited for sole proprietors or individual/joint filers with annual income exceeding $200,000.
For example, a Virginia resident who sells a large block of appreciated stock could use these credits to help offset the Virginia income tax owed on the capital gain. Similarly, someone selling an investment property or home that generates taxable real estate gains can use the credit to reduce the resulting state tax liability. The same applies to business owners realizing gains from the sale of a company or partnership interest — purchasing credits can help manage the Virginia tax impact in these high-income years.
For those in the right financial situation, purchasing credits through a landowner transfer can be a valuable strategy to reduce Virginia state income tax liability while supporting vital land-conservation initiatives.
If you’re considering an LPTC purchase, act early — the $75 million statewide cap and limited market supply mean prices often rise as year-end approaches.
A qualified land appraisal is required to complete the transaction smoothly. Wendroff CPA maintains relationships with established brokerage firms that can assist with reviewing appraisals, managing paperwork, and negotiating purchase terms.
Our team can also help you identify available credits, determine the optimal purchase amount, and evaluate how this strategy fits within your overall Virginia tax plan.
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