All Roll Calls
Yes: 321 • No: 6
Sponsored By: Rae Cousins (Democratic)
Became Law
Real property tax; local classification or designation for portion of property. Clarifies that, in accordance with the Constitution of Virginia and by adoption of a local ordinance, any locality may by designation or classification exempt from real or personal property taxes, or both, the real or personal property, or both, owned by an ownership entity of which a controlling interest of the managing member or general partner of such ownership entity is held, directly or indirectly, by one or more nonprofit organizations, notwithstanding any for-profit ownership interests, that is used for charitable or benevolent purposes. The bill requires such local ordinance to stipulate any suspension or termination of such exemption in such ordinance.The bill also provides that any rental income or other sources of income received from any portion of real property that is used for charitable or benevolent purposes in accordance with such constitutional designation or classification shall not be considered a source of revenue or profit for which tax shall be assessed. Finally, the bill provides that the purpose of the bill is to stimulate public purpose projects by clarifying that localities have such authority and provides that the provisions of the bill providing that any county, city, or town may exempt from real or personal property taxes, or both, any real or personal property owned by an ownership entity of which a controlling interest of the managing member or general partner of such ownership entity is held directly or indirectly by one or more nonprofit organizations, notwithstanding any for-profit ownership interests, that is used for charitable or benevolent purposes are declaratory of existing law.
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Cities, counties, and towns can exempt nonprofit‑owned property from real or personal property taxes by ordinance. They can also exempt property used for affordable housing when nonprofits control the managing member or general partner. The ordinance must state the allowed use, and the break continues only while the property is used that way. Localities cannot grant exemptions to groups that unlawfully discriminate by religion, race, color, sex, sexual orientation, gender identity, or national origin. A public hearing with a published notice is required; for designation exemptions the hearing is at least seven days after notice and the applicant pays the notice cost, and for classification exemptions the wait is at least five days.
Property tax exemptions are read strictly under the Virginia Constitution. Exemptions granted by the General Assembly before January 1, 2003 remain valid. Exemptions under Article 4 can be revoked using the process in §58.1-3605.2.
When tax‑exempt property starts making money, that part is taxed like other property. Assessors tax only the money‑making portion and the land under it, using the ratio of revenue space to total space. If it is leased for part of a year, they use last year’s average use. Rent used to pay down a local government bond, when a 501(c)(3) uses the property only for charity, does not count as revenue. Income from portions used for charitable or benevolent purposes under the law also does not count as revenue.
Rae Cousins
Democratic • House
There are no cosponsors for this bill.
All Roll Calls
Yes: 321 • No: 6
House vote • 3/6/2026
Senate substitute agreed to by House
Yes: 90 • No: 5
Senate vote • 3/4/2026
Finance and Appropriations Substitute agreed to
Yes: 0 • No: 0
Senate vote • 3/4/2026
Passed Senate with substitute Block Vote
Yes: 40 • No: 0
Senate vote • 3/3/2026
Constitutional reading dispensed Block Vote (on 2nd reading)
Yes: 40 • No: 0
Senate vote • 3/3/2026
Reported from Finance and Appropriations with substitute
Yes: 15 • No: 0
Senate vote • 3/3/2026
Passed by for the day Block Vote (Voice Vote)
Yes: 0 • No: 0
House vote • 2/3/2026
Read third time and passed House
Yes: 97 • No: 0
House vote • 1/28/2026
Reported from Finance with substitute
Yes: 22 • No: 0
House vote • 1/27/2026
Subcommittee recommends reporting with substitute
Yes: 8 • No: 1
House vote • 1/27/2026
Subcommittee recommends reporting with substitute
Yes: 9 • No: 0
Acts of Assembly Chapter text (CHAP0683)
Approved by Governor-Chapter 683 (effective 7/1/2026)
Fiscal Impact statement From TAX (3/24/2026 9:50 am)
Governor's Action Deadline 11:59 p.m., April 13, 2026
Enrolled Bill communicated to Governor on March 14, 2026
Bill text as passed House and Senate (HB854ER)
Enrolled
Signed by President
Signed by Speaker
Senate substitute agreed to by House (90-Y 5-N 0-A)
Passed Senate with substitute Block Vote (40-Y 0-N 0-A)
Finance and Appropriations Substitute agreed to
Committee substitute printed 26108143D-S1
Engrossed by Senate - committee substitute
Read third time
Passed by for the day Block Vote (Voice Vote)
Constitutional reading dispensed Block Vote (on 2nd reading) (40-Y 0-N 0-A)
Rules suspended
Reported from Finance and Appropriations with substitute (15-Y 0-N)
Fiscal Impact statement From TAX (2/17/2026 3:55 pm)
Referred to Committee on Finance and Appropriations
Constitutional reading dispensed (on 1st reading)
Read third time and passed House (97-Y 0-N 0-A)
Engrossed by House - committee substitute
committee substitute agreed to
Chaptered
4/13/2026
Enrolled
3/13/2026
Substitute
3/4/2026
Substitute
1/29/2026
Substitute
1/27/2026
Introduced
1/13/2026
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