Partial Exemption on Rehabilitated Buildings
Rehabilitation Tax Credits
Substantial relief from real estate taxes is available to property owners who rescue, repair and rehabilitate qualified older buildings. Subject to the following qualifications, real estate tax is deferred on the value of the improvements to the property.
You can print City code here
Eligibility of residential real property:
- Residential use shall include single-family dwellings, duplexes, multi-family dwelling units, & townhouses; and
- Structure be no less than forty (40) years of age; and
- If structure is assessed at less than $10,000, said structure can be demolished if not a registered Virginia Landmark or is determined by the Department of Historic Resources not to have contributory significance if in a registered historic district. If demolished, the replacement structure must be a single-family residence with an assessed value of at least 120% of the median value of other dwelling units in the neighborhood; and
- Assessed value must be increased by at least forty (40) percent and be designed for suitable residential use after completion of improvement; and
- Increasing the total square footage of structure will have no restrictions on size, as long the increases comply with City zoning ordinances.
Eligibility of commercial real property:
- Be no less than twenty-five (25) years of age; and
- Be improved so as to increase the assessed value of the structure by no less than sixty (60) percent; and
- Be improved without increasing the total square footage of such structure by more than one hundred percent (100%); and
- Be designed for and suitable for commercial or industrial use after completion of such improvement.
*Note: If an exemption is granted for commercial or industrial properties, no other exemption, including ones pertaining to enterprise zones, will be granted, even if the use of the property changes.
- The application form must be filed with Real Estate Valuation by the owner of the building prior to the commencement of any rehabilitation work.
- The application fee is $50.00. In those cases where new tax numbers are created, the fee is $50 for each new number created under this program.
- An "on site" inspection and appraisal must be conducted by an appraiser from the Office of Real Estate Valuation prior to the commencement of any rehabilitation work and immediately following such work.
- No exemption shall be granted if access to the entire property is denied to the Office of Real Estate Valuation for either inspection or appraisal.
- All appropriate building permits must be obtained prior to the commencement of any work.
- Effective Date/Amount/Duration of Exemption
- The exemption for a qualifying structure commences on July 1 of the tax year following the completion date
- The amount of the exemption shall be a fixed amount equal to the difference in the appraised value immediately before commencement of substantial rehabilitation and the appraised value immediately after completion of substantial rehabilitation, as determined by the Office of Real Estate valuation.
- Only one exemption per structure is applicable at any point in time.
- The exemption shall run with the real estate for a period of five consecutive years, except exemptions in the H-1 & H-2 Historical Districts and the Conservation/Rehabilitation Districts shall run for a period of ten consecutive years, with an additional 4 year period applying to those residential structures that will have at least a 50% net reduction in the number of dwelling units after the rehabilitation.
- If the residential structure has an assessed value, prior to rehabilitation, equal to or greater than $300,000, the exemption shall begin on July 1st of the tax year following completion of the rehabilitation, renovation, or replacement and shall only run with the real estate for three years. This will apply regardless of its historic designation, its location, or the percent net reduction in number of dwelling units after rehabilitation.
Tax Exemption for Use of Certified Solar Energy Equipment
As a result of an amendment to Sections 32-103.5 through 32-103.17 of the code of the City of Roanoke, addition of new Division 8, owners of real estate to which certified energy equipment, facilities, or devices are attached can apply for tax exemption as follows:
- Amount of the exemption will be determined by applying the tax rate to the value of the certified solar equipment, facilities, or devices and subtracting that amount from the total real estate property tax due on the real property to which such equipment, facilities, or devices are attached, or if such equipment, facilities, or devices are taxable as machinery and tools, from the total machinery and tool tax due on such equipment, facilities, or devices, at the election of the taxpayer.
- The exemption shall be effective for five years, and can apply to properties installing new solar equipment, facilities, or devices as well as to properties with existing solar equipment, facilities, or devices.
- The exemption will be administered by the Department of Planning, Building, and Development, the Department of Real Estate Valuation, the Commissioner of the Revenue's Office, and the City Treasurer's Office.