Among regional governments offering tax incentives for sprucing up older homes, Richmond's program is the oldest (a version started in 1979), while Henrico's is the most recent addition. In all cases, an inspection is required to establish a base value. The programs apply to the property and can be passed on to a new owner.
In January, Henrico started a program called Reinvest (Residential Investment Tax Abatement), a partial tax-exemption program to spur the rehabilitation of homes with an assessed value of $200,000 or less that are 40 years old and above. Improvements, completed in three years, must increase the house's value by at least 20 percent. There are no taxes on the improvements for seven years.
About nine years ago, Chesterfield County introduced a similar partial tax exemption for home improvements on residences 25 years and older. (Residences between 10 to 25 years old may qualify if physical depreciation took down the assessment by 10 percent or more.) The improvements must be made during a two-year period to qualify for the eight-year exemption. Here, the assessed value must be increased by 10 percent.
Hanover expanded a historic-district property exemption in 2007 to houses at least 25 years old. Rehabilitation must increase the home's value by at least 30 percent, and the exemption runs 10 years.
Richmond's program underwent its latest revamping in 2006. The current program sunsets in June, but City Council's renewal is expected. A property must be 20 years old, improvements need to be completed in 24 months, and the home's value must increase by 20 percent. City assessor James Hester explains, "The increase in market value over the base becomes an assessment credit for a full seven years, then it rolls off in three increments of a year — 5, 50 and 25 percent of the full amount."
Follow the Money
Chesterfield: Real Estate Assessments Incentive Program, 751-4315 or chesterfield.gov
Hanover: Commissioner of Revenue, 365-6125 or co.hanover.va.us
Henrico: Department of Finance, go to Reinvest: Residential Tax Credit, 501-4217 or co.henrico.va.us .
Richmond: Assessor, Rehabilitation Overview, 646-5227 or richmondgov.com .
