As an incentive for property owners and investors to rehabilitate older structures, the City Of Richmond introduced The Richmond Real Estate Tax Abatement Program. By law, older structures are defined as properties that are at least 20 years or older. Qualified properties have been rehabilitated or replaced and are currently eligible for 10 years of tax abatement. Whether you own a single family properties, multifamily properties or commercial/industrial properties, you could be eligible to receive an abatement on your taxes.
Here’s how the tax abatement program works:
First, decide whether your property is in need of rehabilitation. The property’s value must be increased by at least 20% in order to qualify for the program.
Visit or call the City of Richmond Assessor’s Office to find out if your property meets the preliminary qualifications for the program.
Does it qualify? Yes? Good, Move Forward!
Next, you need to get permits. AN APPLICATION CANNOT BE COMPLETED WITHOUT PERMITS. File for your permit and then head to the Assessor’s office to fill out an application. Application fees for single family properties (1-4 units) are only $125. For all other properties the fee is $250.
After your application has been processed, an appraiser from the Assessor’s Office will meet you at the property for an as-is base inspection. The initial inspection is to set the base value of the property. The difference between your final and base values will determine the abatement credit that you’ll receive.
Once you start the process, you’ll have 2 years to complete your rehabilitation. You must complete your rehab in 2 years or less, or you will be disqualified. However, you can receive credit for the work that you have completed if the value has been increased by 20% or more by the 2 year anniversary.
In the even that you are disqualified from the program, then you must reapply for the abatement program. The process starts over.
When you’ve finished the rehab, you will contact the Assessor’s Office for a final value inspection. Provided that you’ve increased the value by 20% or more (40% or more for multifamily, commercial, industrial or mixed use) and have followed any additional guidelines set forth, then your property will qualify for the tax abatement program.
Furthermore, your tax bill should reflect the tax abatement credit the year after your rehab is complete.
But wait! There’s more!
In addition to older structures, the program also covers new construction in Redevelopment and Conservation areas of the city. So you could literally purchase a vacant parcel, build a new structure and pay little to no tax on the assessed value of the improvements to the land. However, any value increases due to market appreciation will not count in the original abatement.
For more information, a complete description including the provisions for this partial tax exemption are found in Code Section 26-579.