                                 CODE OF VIRGINIA

PARTIAL EXEMPTION FOR CERTAIN REHABILITATED, RENOVATED OR REPLACEMENT
RESIDENTIAL STRUCTURES (§ 58.1-3220)

A. The governing body of any county, city or town may, by ordinance, provide for
the partial exemption from taxation of real estate on which any structure or
other improvement no less than 15 years of age has undergone substantial
rehabilitation, renovation or replacement for residential use, subject to such
conditions as the ordinance may prescribe. The ordinance may, in addition to any
other restrictions hereinafter provided, restrict such exemptions to real
property located within described zones or districts whose boundaries shall be
determined by the governing body. The governing body of a county, city or town
may (i) establish criteria for determining whether real estate qualifies for the
partial exemption authorized by this provision, (ii) require such structures to
be older than 15 years of age, (iii) establish requirements for the square
footage of replacement structures, and (iv) place such other restrictions and
conditions on such property as may be prescribed by ordinance. Such ordinance
may also provide for the partial exemption from taxation of multifamily
residential units that have been substantially rehabilitated by replacement for
multifamily use.

B. The partial exemption provided by the local governing body may be an amount
equal to the increase in assessed value or a percentage of such increase
resulting from the rehabilitation, renovation or replacement of the structure as
determined by the commissioner of revenue or other local assessing officer or an
amount up to 50 percent of the cost of the rehabilitation, renovation or
replacement, as determined by ordinance. The exemption may commence upon
completion of the rehabilitation, renovation or replacement or on January 1 of
the year following completion of the rehabilitation, renovation or replacement
and shall run with the real estate for a period of no longer than 15 years. The
governing body of a county, city or town may place a shorter time limitation on
the length of such exemption, or reduce the amount of the exemption in annual
steps over the entire period or a portion thereof, in such manner as the
ordinance may prescribe.

C. The local governing body or its designee shall provide written notification
to the property owner of the amount of the assessment of the property that will
be exempt from real property taxation and the period of such exemption. Such
exempt amount shall be a covenant that runs with the land for the period of the
exemption and shall not be reduced by the local governing body or its designee
during the period of the exemption, unless the local governing body or its
designee by written notice has advised the property owner at the initial time of
approval of the exemption that the exempt amount may be decreased during the
period of such exemption. In no event, however, shall such partial exemption
result in totally exempting the value of the structure.

D. Nothing in this section shall be construed as to permit the commissioner of
the revenue to list upon the land book any reduced value due to the exemption
provided in subsection B.

E. The governing body of any county, city or town may assess a fee not to exceed
$125 for residential properties, or $250 for commercial, industrial, and/or
apartment properties of six units or more for processing an application
requesting the exemption provided by this section. No property shall be eligible
for such exemption unless the appropriate building permits have been acquired
and the commissioner of the revenue or assessing officer has verified that the
rehabilitation, renovation or replacement indicated on the application has been
completed.

F. Where rehabilitation is achieved through demolition and replacement of an
existing structure, the exemption provided in subsection A shall not apply when
any structure demolished is a registered Virginia landmark or is determined by
the Department of Historic Resources to contribute to the significance of a
registered historic district.

HISTORY: Code 1950, § 58-760.2; 1979, c. 195; 1980, c. 417; 1981, c. 625; 1984,
cc. 675, 750; 1986, c. 271; 1989, cc. 89, 656; 1994, cc. 424, 435; 1995, c. 673;
2001, c. 489; 2002, cc. 21, 144; 2011, cc. 423, 460.