                                 CODE OF VIRGINIA

ASSESSMENT OF REAL PROPERTY; AFFORDABLE RENTAL HOUSING (§ 58.1-3295)

A. Notwithstanding any other provision of law, in determining the fair market
value of real property operated in whole or in part as affordable rental
housing, in accordance with the provisions of 12 U.S.C. § 1701q, 26 U.S.C. §
42, 26 U.S.C. § 142(d), 42 U.S.C. § 1485, 42 U.S.C. § 1437f as it applies to
programs providing project-based assistance as defined in subsection (f)(6) of
such section, 24 C.F.R. § 983, 24 C.F.R. § 236, 24 C.F.R. § 241(f), 24 C.F.R.
§ 221(d)(3), § 8 of the Housing Act of 1937, §§ 515 and 538 of the Housing
Act of 1949, § 202 of the Housing Act of 1959, the federal Rental Assistance
Demonstration program established under the Consolidated and Further Continuing
Appropriations Act, 2012 (P.L. 112-55), or any successors thereto, the duly
authorized real estate assessor shall consider:

   1. The contract rent and the impact of applicable rent restrictions;

   2. Restrictions on the transfer of title or other restraints on alienation of
   the real property; and

   3. The actual operating expenses and expenditures and the impact of any such
   additional expenses or expenditures. If an owner has two or more units of real
   property that (i) are operated in whole or in part as affordable rental
   housing and (ii) are controlled by a single restrictive use agreement
   regulating income and rent restrictions, and the owner has expenses and
   expenditures common to two or more such units, and such expenses and
   expenditures cannot practicably be attributed to a particular unit, then the
   owner has a right to have the assessor make a pro rata apportionment of such
   expenses and expenditures to each such unit based on each unit&#8217;s
   assessed value as a percentage of the total assessed value of all such units.
   The provisions of this subdivision apply whether or not the units are in one
   tax parcel or multiple tax parcels.
   				Affordable rental housing that is not assessed with the income approach
   shall be reassessed in accordance with subsection E when it generates income.

B. The owner of real property that is operated in whole or in part as affordable
rental housing in accordance with the definition of affordable rental housing
established by ordinance or resolution of the locality in which the real
property is located may make an application to the locality to have the real
property assessed pursuant to this section. Notwithstanding the exception in
&#xA7; 58.1-3294 for an owner of four or fewer residential units, upon
application by such an owner, the duly authorized real estate assessor may
require the owner to furnish to such assessor, board, or department statements
of the income and expenses attributable over a specified period of time to each
such parcel of real estate in the manner required by &#xA7; 58.1-3294 and to
comply with all provisions of &#xA7; 58.1-3294 applicable to properties with
more than four rental dwelling units. The application shall be granted by the
locality if (i) the owner charges rents at levels that meet the locality&#8217;s
definition of affordable rental housing and (ii) the real property does not have
any pending building code violations at the time of the application.
			The duly authorized real estate assessor shall also consider evidence
presented by the property owner of other restrictions imposed by law that impact
the variables set forth in this subsection.

C. Federal or state income tax credits with respect to affordable rental housing
property within the purview of subsection A shall not be considered real
property or income attributable to real property.

D. For property where only a portion of the units are operated as affordable
rental housing, as defined in &#xA7; 42 of the Internal Revenue Code or as
required by state law or applicable local ordinance, only the portion determined
to be affordable rental housing shall be subject to this section.

E. Notwithstanding any other provision in this section or other law, affordable
rental housing that is generating income and operated in accordance with the
provisions of federal law enumerated in subsection A, shall be assessed using
the income approach as set forth in subsection A based on: the property&#8217;s
current use, contract rent, income restrictions, provisions of any
arm&#8217;s-length contract including restrictions on the transfer of title or
other restraints on alienation of the real property, and actual operating
expense and capitalization rate data from comparable affordable housing. If such
information is not provided by the property owner in accordance with &#xA7;
58.1-3294 or is not available on relevant commercial or governmental databases,
the property may be assessed in accordance with subsection A.

F. The Department shall develop a uniform income and expense reporting form that
may be provided by duly authorized assessors and completed by the owners of
affordable rental housing properties prior to assessment of such affordable
rental housing properties. Such owner&#8217;s completion and submittal to the
assessor of the uniform income and expense reporting form developed in
accordance with this section or such owner&#8217;s submittal of full and
accurate financial data provided in response to such form shall be presumed to
comply with the requirements of &#xA7; 58.1-3294.

HISTORY: 2006, c. 688; 2009, c. 264; 2010, cc. 552, 791, 824; 2011, c. 137;
2013, c. 249; 2022, c. 624; 2025, c. 456.