Rehabilitation Tax Credits

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.

City Code

You can print City code here

Eligibility of residential real property:

• Residential use shall be limited to single-family dwellings.
• Structure must be constructed prior to January 1, 1970.
• Single family residential building with assessed value of $250,000 or less at date of application.
• 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.
• Assessed value must be increased by at least forty (40) percent and be designed solely for single-family use after completion of improvement.
• 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, multi-family and mixed-use real property:

• Structure must be constructed prior to January 1, 1970.
• Be improved so as to increase the assessed value of the structure by no less than sixty (60) percent.
• Be improved without increasing the total square footage of such structure by more than one hundred percent (100%).
• Be designed for and suitable for commercial, multi-family or mixed-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.
Application Requirements

• The Application for Rehab Properties on the Documents & Forms page must be filed with Real Estate Valuation by the owner of the building prior to the commencement of any rehabilitation work.
• The application fees are:

1. Residential Single Family $175
2. Commercial, Multi-Family Residential or Mixed-Use Real Property $250

• 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.
• 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.

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.

• You can view and print the Application for Solar Energy on the Documents & Forms page.