Joe Craver lives in a 2,700-square-foot home in Bon Air and pays taxes on just 1,400 square feet. Before you shout, "no fair," have you checked out the region's tax abatement programs for home renovations?
They are a huge boon to homeowners in Chesterfield and Henrico counties, and in the city of Richmond who are looking to renovate and update their older homes. The gist: If you make improvements that increase the value of your home by a certain percentage, your real estate tax for the portion of the home that has been improved is waived for seven to eight years, depending on where you live. Your house doesn't even have to be historically significant.
Craver, who spent his career in custom-home construction, has taken advantage of the Chesterfield County tax abatement program twice. His home was built in 1957, so it met the county criteria of being at least 25 years old, and the improvements he made to the front and to the rear of the original structure increased its value by at least 10 percent. Each abatement lasts for eight years.
For more details on each locality's tax abatement and federally funded repair programs, see
A Closer Look: Tax Abatement by Jurisdiction
In Richmond, homes have to be at least 20 years old, and the final assessed value must increase by at least 20 percent.
Henrico requires homes to be at least 40 years old and less than $200,000 in assessed value to qualify. Renovations must increase the home's value by at least 20 percent. (See chart online for more details on each program.) Abatements last seven years in Richmond and Henrico, though Richmond has an additional three-year, stair-step program. Once the seven years are up, homeowners incrementally ease into paying taxes on the new assessed value. It's not until year 11 that the full tax assessment kicks in.
Craver and his wife, Barbara, bought their home with the intention of renovating and selling; if they sell during the abatement period, the savings transfer to the new owners. This is a bonus for attracting potential buyers, as are the improvements that went into the Cravers' house. Those included additional space, a new generator and universal design to make the home wheelchair accessible.
For those not schooled in home renovations, Henrico County has a resource called the Homeowners Enhancement Guide. While it is geared toward renovating Henrico homes built in the 1950s through 1970s, it is also a comprehensive guide for home-improvement how-to that anyone can use.
"It's got everything from landscaping to improve your home, ideas for putting additions on houses and opening up the interior, maintenance checklists, how to pick contractors, and where to look for money for additions," says Mark Strickler, community revitalization director. The guide is available for download at co.henrico.va.us .
Historic Tax Credits: Where Do They Come From?
Historic preservation projects are huge in Richmond, though financial assistance for these comes from the state through the Virginia Department of Historic Resources. For qualifying homes in state historic districts, there is a state tax credit for 25 percent of the cost of the rehabilitation, according to Mary Harding Sadler, an architect with Sadler & Whitehead Architects. To qualify, the rehabilitation expenses must be at least 25 percent of the structure's assessed value for the year before the rehabilitation work began.
Keep in mind that homes on the Virginia Landmark Register that are also in a city-designated historic district and undergoing major exterior changes must also pass review by the Commission of Architectural Review (CAR), Richmond's official historic preservation body. CAR reviews all exterior changes to structures within the city's Old and Historic Districts. (Download Richmond Old and Historic Districts Handbook and Design Review Guidelines at richmond.gov. ) Also, while the city tax abatement and state historic tax-credit programs are indeed completely separate, it is possible for a home to qualify for both.
Not sure if your home is in a city, state or federal historic district or all of the above? The parcel mapper on the GIS page at richmond.gov will indicate both city and national historic districts. You won't see a state designation, but all of the National Register Districts listed in GIS are on the Virginia Landmarks Register. For more info, you can drop by the Department of Historic Resources in the Fan, or check out standards for rehabilitation online ( www.dhr.virginia.gov ).
Energy-Improvement Rebates
Despite massive marketing efforts to "go green," the average person doesn't usually consider improving home energy use, says Bill Greenleaf, the executive director of the Richmond Region Energy Alliance (RREA), a federally funded nonprofit that tries to get homeowners to invest in home-energy efficiency. "The majority of people who contact us have comfort issues in their house," Greenleaf says. "They can't keep it cool in summer or warm in winter."
Energy-efficiency improvements can increase the value of a home and therefore qualify for city and county tax abatement programs. To sweeten the pot, RREA offers a few incentives: low-interest loans and a $500 rebate on the cost of improvements. To get the rebate, homeowners must undergo an energy assessment and use one of RREA's pre-qualified contractors to complete the project, and the improvements have to result in a projected savings of 20 percent on energy bills. Currently, RREA also is offering a $250 coupon toward the required energy assessment, which usually runs about $300 to $400.
