VirginiaSB1812026 Regular SessionSenateWALLET

Real property tax; partial exemption for repurposing underutilized structures for residential use.

Sponsored By: Angelia Williams Graves (Democratic)

Signed by Governor

Summary

Real property tax; partial exemption for repurposing underutilized structures for residential use; local incentives. Permits localities to provide partial real estate taxation exemptions for converted real property where such conversion establishes a residential structure that has set aside at least 30 percent of the structure for households with a per capita income at or below 80 percent of the locality's median income or where the building owner is subject to an agreement with the Commonwealth or the locality regarding the provision of affordable housing. Localities have discretion to determine (i) whether a converted building qualifies for the partial exemption, (ii) any additional restrictions and conditions, (iii) whether the exemption is the amount equal to the increase in assessed value or a percentage of such increase resulting from the repurposing of the structure, and (iv) the length of time the exemption will run with the land, not to exceed 15 years. The bill provides that, at any time a building for which its owner claims a partial exemption no longer meets the requirements to receive such exemption, the locality may recapture all or a portion of the exemption granted in the immediately preceding year. Further, if a building owner that claims an exemption as described by the bill sells the building for which he is claiming the exemption and, after the sale, the property no longer meets the requirements described by the bill, the purchaser shall be subject to a penalty. The building owner shall provide written notification of the partial exemption to the purchaser. The bill also permits localities to grant tax incentives or provide regulatory flexibility to qualifying converted real property.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 0 benefits, 0 costs, 2 mixed.

Tax relief for rebuilt rental housing

Virginia localities can extend partial property tax exemptions to multifamily buildings replaced with multifamily housing. The old structure must generally be at least 15 years old; local rules can require a greater age. Owners need required permits and local verification of completion. Local rules can base relief on the assessed-value increase or up to 50% of rehabilitation, renovation, or replacement costs. Relief lasts no more than 15 years, and localities can shorten or phase it down. The exemption cannot remove the structure's entire taxable value. Demolition and replacement of a registered Virginia landmark does not qualify. Neither does a structure the state historic resources department finds contributes to a registered historic district. The law removes statutory authority for the $125 residential and $250 commercial exemption processing fees. Assessors do not have to show a lower land-book value because of the exemption.

Lower fees for qualifying housing conversions

Virginia localities can adopt programs offering lower permit fees, faster approvals, and lower taxes on business gross receipts for housing conversions. Tax relief can cover a qualifying conversion or businesses maintaining the converted building. Projects must meet the same building-age, conversion-cost, and affordability tests used for the conversion property tax exemption. Incentives must be proportional to eligible costs; purchase costs, enlargement costs, and costs tied to tax-exempt property do not count. Localities may also consider population density.

Sponsors & Cosponsors

Sponsor

  • Angelia Williams Graves

    Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 299 • No: 101

Senate vote • 4/22/2026

Senate concurred in Governor's recommendation

Yes: 21 • No: 18

House vote • 4/22/2026

House concurred in Governor's recommendation

Yes: 65 • No: 31

Senate vote • 3/4/2026

House substitute agreed to by Senate

Yes: 21 • No: 19

House vote • 3/2/2026

Passed House with substitute

Yes: 70 • No: 29

House vote • 2/25/2026

Reported from Finance with substitute

Yes: 17 • No: 4

House vote • 2/24/2026

Subcommittee recommends reporting with substitute

Yes: 11 • No: 0

Senate vote • 2/2/2026

Read third time and passed Senate Block Vote

Yes: 40 • No: 0

Senate vote • 1/30/2026

Engrossed by Senate Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 1/29/2026

Constitutional reading dispensed Block Vote (on 1st reading)

Yes: 40 • No: 0

Senate vote • 1/29/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 1/28/2026

Reported from Finance and Appropriations

Yes: 14 • No: 0

Actions Timeline

  1. House concurred in Governor's recommendation (65-Y 31-N 0-A)

    4/22/2026House
  2. Senate concurred in Governor's recommendation (21-Y 18-N 0-A)

    4/22/2026Senate
  3. Acts of Assembly Chapter text (CHAP0994)

    4/22/2026Governor
  4. Reenrolled bill text (SB181ER2)

    4/22/2026Senate
  5. Reenrolled

    4/22/2026Senate
  6. Approved by Governor-Chapter 994 (effective 7/1/2026)

    4/22/2026Governor
  7. Signed by President

    4/22/2026Senate
  8. Signed by Speaker

    4/22/2026House
  9. Governor's recommendation adopted

    4/22/2026Governor
  10. Governor's recommendation received by Senate

    4/12/2026Governor
  11. Fiscal Impact statement From TAX (3/20/2026 11:42 am)

    3/20/2026Senate
  12. Governor's Action Deadline 11:59 p.m., April 13, 2026

    3/14/2026Governor
  13. Enrolled Bill communicated to Governor on March 14, 2026

    3/14/2026Senate
  14. Bill text as passed Senate and House (SB181ER)

    3/10/2026Senate
  15. Enrolled

    3/10/2026Senate
  16. Signed by President

    3/10/2026Senate
  17. Signed by Speaker

    3/10/2026House
  18. House substitute agreed to by Senate (21-Y 19-N 0-A)

    3/4/2026Senate
  19. Passed House with substitute (70-Y 29-N 0-A)

    3/2/2026House
  20. Engrossed by House - committee substitute

    3/2/2026House
  21. committee substitute agreed to

    3/2/2026House
  22. Read third time

    3/2/2026House
  23. Read second time

    2/27/2026House
  24. Committee substitute printed 26108536D-H1

    2/26/2026House
  25. Reported from Finance with substitute (17-Y 4-N)

    2/25/2026House

Bill Text

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