Buying Virginia tax credits: which Virginia credits can be transferred
By the Tax Field Guide editorial team. Published 2026-11-06. Facts checked 2026-11-06. Related strategies: State Conservation Credits, Purchased Energy Credits.
Education only; not tax, legal or investment advice. Tax rules change, and how they apply depends on your facts. No outcome is guaranteed.
People with Virginia income tax liability sometimes look for state credits they can buy at a discount. Virginia's flagship transferable program is the Land Preservation Tax Credit. A smaller producer credit for biodiesel and green diesel is also transferable. Several other well-known Virginia credits are not free-standing sale credits: historic rehabilitation, motion picture production, education scholarships and most housing credits stay with the project owner or donor (or move only when an ownership interest moves). This guide is based on Virginia Tax pages, the 2025 Schedule CR instructions and the Code of Virginia. See the Virginia state page for every Virginia incentive we track.
Transferable Virginia credits
| Credit | Who can buy / receive | Key limits | Source |
|---|---|---|---|
| Land Preservation Tax Credit | Another Virginia income taxpayer | 40% of fair market value of a perpetual donation; $75 million issued per year; buyer claim limit $20,000 per taxpayer per year from 2024; Form LPC-2; transfer fee generally 2% of donated-interest value (5% of credit) for donations on/after Jan 1, 2007 | Va. Code §§58.1-512, 58.1-513; Virginia Tax123 |
| Biodiesel and green diesel fuels producer credit | Another taxpayer (Form BFC) | 1¢ per gallon; $5,000 max; first three production years only; nonrefundable with 3-year carryforward | Va. Code §58.1-439.12:02; Virginia Tax45 |
Land preservation (the main market)
Donors who convey Virginia land or a perpetual conservation easement to an eligible public or private conservation holder can earn a credit equal to 40% of fair market value, backed by a qualified appraisal. Virginia Tax issues no more than $75 million of these credits a year, first come, first served. Each taxpayer may claim up to $20,000 per year (limits for earlier years are in that year's Schedule CR).1
Credits originating on or after January 1, 2002, may be transferred to another taxpayer for use on a Virginia return. Transfers and many pass-through allocations from donations recorded on or after January 1, 2007, generally pay a fee equal to 2% of the donated-interest value, which is 5% of the credit being transferred; pay it with Form LPC-2. Transfers to a designated beneficiary at death are exempt from that fee.23 Buyers are subject to the same annual claim limit. Unused credit may be carried forward (donors generally up to 10 years; most transferees up to 11 years from original issuance).1
Our deeper guide covers rates, caps, Form LPC-2 and buyer questions: Virginia Land Preservation Tax Credit.
Biodiesel / green diesel producer credit
Virginia Tax's environmental-credits page states that the biodiesel and green diesel fuels producer credit is transferable. Producers of up to 2 million gallons a year may earn 1 cent per gallon (maximum $5,000) during the first three years of production, then transfer via Form BFC and claim on the return for the year the transfer is completed.45 This is a niche producer credit, not a large retail market like land preservation.
Virginia credits that generally cannot be bought as certificates
- Historic rehabilitation credit (25%): Va. Code §58.1-339.2 does not authorize selling the credit. Virginia Tax P.D. 17-208 says credits are privileges and are not transferable unless the General Assembly says so. Partners and S corporation shareholders may allocate the credit by ownership share or written agreement, and a transfer of a partnership interest can carry an allocated share—but that is not the same as buying a free-standing credit certificate.67
- Motion picture production credit: Refundable to the production company under Va. Code §58.1-439.12:03; the statute has no third-party sale provision (pass-through entities may allocate to owners).8
- Education Improvement Scholarships credit: 65% of qualifying donations to approved scholarship foundations; carryforward only. A 2023 bill to make it transferable did not become law.59
- Neighborhood Assistance Act credit: Virginia Tax describes it as non-refundable and non-transferable.10
- Livable Home and Communities of Opportunity credits: Schedule CR and Virginia Tax housing pages describe carryforwards, not sales to unrelated buyers.510
- Worker training credit: Nonrefundable with a short carryforward; no transfer language in Schedule CR (and new credits are limited to taxable years beginning before July 1, 2025).5
- Riparian waterway buffer credit: Carryforward up to five years; no transfer provision in the riparian statutes.11
Housing Opportunity Tax Credit (limited interest assignment)
The Virginia Housing Opportunity Tax Credit (state LIHTC companion) lets pass-through entities and qualified taxpayers assign entity interests that include the credits under Va. Code §58.1-439.30. That is an ownership-interest path, not a statewide certificate marketplace like land preservation. The same statute also asks agencies to advise on a possible future certificated sale program—which underscores that open certificate sales are not the current default.12
Before buying any Virginia credit
Ask who holds the credit, whether Virginia Tax has issued or acknowledged it (for land preservation, LPC-1 / LPC-2 paperwork), how the transfer fee and annual claim limit work, how recapture risk is allocated, and how the transfer will be reported. Our questions to ask a tax credit broker and how state tax credit transfers work cover the general process. Virginia firms whose public sites describe land-preservation brokerage, historic credits, cost segregation or related incentive work appear in the advisor directory.
Common questions
Can I buy Virginia land preservation tax credits?
Yes, if a holder transfers unused credits originating on or after January 1, 2002, you file within the LPC-2 timing rules, and you have Virginia tax liability within the annual claim limit.
Can Virginia historic rehabilitation credits be sold?
Not as free-standing credits. The statute allows partnership/S corporation allocation, not a general sale to any taxpayer (P.D. 17-208).
Can Virginia film tax credits be sold?
No. The motion picture production credit is refundable to the production company; the statute does not create a buyer market.
Is the biodiesel producer credit really transferable?
Virginia Tax's environmental-credits page says yes and points to Form BFC for transfers.
Education only; not tax, legal or investment advice. Talk to a qualified professional before acting.
Sources
- Virginia Tax, Land Preservation Tax Credit, https://www.tax.virginia.gov/land-preservation-tax-credit
- Virginia Tax, Transferring a Land Preservation Tax Credit, https://www.tax.virginia.gov/transferring-land-preservation-tax-credit
- Va. Code §58.1-513; 2025 Form LPC-2 Instructions, https://law.lis.virginia.gov/vacode/title58.1/chapter3/section58.1-513/
- Virginia Tax, Environmental Credits (Biodiesel), https://www.tax.virginia.gov/environmental-credits
- Virginia Tax, 2025 Schedule CR Instructions, https://www.tax.virginia.gov/sites/default/files/vatax-pdf/2025-sch-cr-instructions.pdf
- Va. Code §58.1-339.2, https://law.lis.virginia.gov/vacode/title58.1/chapter3/section58.1-339.2/
- Virginia Tax, P.D. 17-208, https://www.tax.virginia.gov/laws-rules-decisions/rulings-tax-commissioner/17-208
- Va. Code §58.1-439.12:03, https://law.lis.virginia.gov/vacode/title58.1/chapter3/section58.1-439.12:03/
- Va. Code §58.1-439.26, https://law.lis.virginia.gov/vacode/title58.1/chapter3/section58.1-439.26/
- Virginia Tax, Housing and Community Development Tax Credits, https://www.tax.virginia.gov/housing-and-community-development-tax-credits
- Va. Code §§58.1-339.10 and 58.1-439.12, https://law.lis.virginia.gov/vacode/title58.1/chapter3/section58.1-339.10/
- Va. Code §58.1-439.30, https://law.lis.virginia.gov/vacode/title58.1/chapter3/section58.1-439.30/