Tax Credits
Partial Tax Exemption on Rehabilitated Buildings
This exemption is provided by the city of Roanoke for buildings, 25 years old or older, suitable for residential, commercial, or industrial use. Buildings must be improved to increase the assessed value no less than 60% for commercial and industrial structures or 40% for residential structures. The exemption runs with the building for a period of five years and is equal to the difference in the appraised value immediately before rehabilitation and the appraised value after completion of rehabilitation. (Note: Exemptions within H-1 and H-2 Historical Districts or Conservation/Rehabilitation Districts run for ten years. Residential structures with an assessed value prior to rehabilitation of more than $300,000 get a three year exemption.) The total square footage of the structure cannot be increased by more than 15%. Application for the exemption must be made prior to beginning any construction because a preconstruction appraisal is required for participation. Contact the Commissioner of the Revenue at (540) 853-2523.
Partial Tax Exemption in Redevelopment and Conservation Areas as well as Rehabilitation Districts
New construction in Redevelopment and Conservation Areas as well as Rehabilitation Districts may be eligible for a partial tax exemption. New residential structures must be designed for and used as a principal single-family home with an assessed value of at least 120% of the median value of other residentail structures in the neighborhood, as determined by the director of Real Estate Valuation. New commercial structures must be in districts zoned CN - Neighborhood Commercial and comply with the purposes permitted in CN. The amount of the exemption from real property taxation is an amount equal to the increase in assessed value resulting from the construction of the new structure or other improvement to the real estate, as determined by the director of Real Estate Valuation. This amount only, on a fixed basis, constitutes the exemption, beginning on January 1 of the year following completion of the new construction. This exemption runs with the real estate for a period of ten (10) years for residential construction initially assessed at under $300,000 and three (3) years if assessed for more. For CN districts, the exemption shall run will the real estate for a period of ten (10) years if initially assessed for under $800,000 and five (5) years if assessed for more. Only one exemption under this division is allowed at any point in time. Application for the exemption must be made prior to beginning any construction because a preconstruction appraisal is required for participation. This exemption does not apply when any existing structure is demolished and a replacement structure is built, unless the existing structure assesssed for less than $10,000. If the structure is a Virginia registered landmark or contributes to the significance of a registered historic district, the exemption does not apply. Contact the Commissioner of the Revenue at (540) 853-2523.
Partial Tax Exemption on Energy Efficient Buildings
Beginning July 1, 2007, any existing or proposed building exceeding energy efficient standards as contained in the Uniform Statewide Building Code (USBC) by 30%, will pay a special real estate tax rate of $1.07/$100 for a term of five years. Applications for the special tax rate program for energy efficient buildings must be submitted to the Building Commissioner’s Office, Division of Building Inspections of the Department of Planning Building and Development. Contact Jeff Shawver at 853-1891 for more information.
Enterprise Zone Rehabilitation Tax Credits
A real estate tax exemption may be available for businesses within Enterprise Zone One A (EZ 1A) and/or Enterprise Zone Two (EZ2) for increasing, through substantial rehabilitation or renovation, the assessed value of an existing commercial or industrial building, and in the case of EZ 1A, mixed-use commercial building (no more than 80% residential). Buildings must be at least 15 years old and have the assessed value of the building increased by at least $50,000. The rehabilitation must be completed in two years or less and all relevant building permits must be obtained. Those buildings receiving prior rehabilitation credits as above are not eligible. Buildings meeting the criteria in EZ 1A will receive a seven (7) year tax exemption on the amount equal to the appraised value immediately before rehabilitation and the appraised value after completion of the renovation, while those in EZ 2 will receive a five (5) year exemption. Additions to buildings will not count toward the $50,000 threshold. Tax exemptions for buildings in EZ 1A are limited to $100,000 over the seven year period, while buildings in EZ 2 are limited to $75,000 over the five year period. Application for the exemption must be made prior to beginning any construction because a preconstruction appraisal is required for participation. Contact the Commissioner of the Revenue at (540) 853-2523.
Federal Rehabilitation Tax Credits
This program provides tax credits for qualifying historic properties used for income-producing purposes. A tax credit for 20% of the rehabilitation costs can be taken for historic properties on the National Register or contributing to a National Register Historic District. Substantial rehabilitation (minimum $5,000) must be undertaken in accordance with the Secretary of the Interior's Standards for Rehabilitation and approved by the National Park Service.
In addition, a Federal Rehabilitation Tax Credit of 10% is available for non-historic buildings built before 1936, which are not on the National Register or contributing to an historic district. Certification by the National Park Service is not required. However, rehabilitation must meet the Secretary of the Interior's Standards of Rehabilitation. Only commercial projects are eligible. Contact John Wells, Virginia Department of Historic Resources, at (804) 367-2323, extension 111, or the Roanoke Regional Preservation Office at (540) 857-7585.
State Rehabilitation Tax Credits
This program provides tax credits for qualifying historic properties on the Virginia Landmarks Register, or properties certified by the Virginia Department of Historic Resources as contributing to an historic district or meeting the criteria for listing on the Register. (National Register properties or districts are included on the Virginia Register.) Rehabilitation expenses must be at least 50% of the prior assessed value of the building for local real estate tax purposes. Properties do not have to be income producing; residential rehabilitation by homeowners qualifies for the credits. A 25% Rehabilitation State Tax Credit is available. The property must be rehabilitated according to the Secretary of the Interior's Standards of Rehabilitation and certified by the Virginia Department of Historic Resources. A tax certificate is issued. For information, contact Michael Pulice, Roanoke Regional Preservation Office, at (540) 857-7586.