City of Lexington, VA Article VI Tax Exemption for Rehabilitated Commercial or Industrial Buildings

Amended 12-19-2013 by Ord. No. 2013-07]

§ 366-32 Declaration of intent and policy.

It is the purpose of this article to implement the provisions of § 58.1-3221 of the Code of Virginia, which defines and classifies rehabilitated commercial or industrial real estate as a separate class of property in order to permit the City to allow a tax exemption on rehabilitated structures thereon. Such exemption will provide an economic incentive to owners and businesses to improve their properties and will help to prevent the vacation and deterioration of old commercial or industrial buildings which are harmful to the health and welfare of the City.

§ 366-33 Exemption authorized.

There is hereby provided an exemption from taxation of structures no less than 25 years of age. The exemption shall apply as set forth hereafter to structures situated in the historic zone (as defined in Chapter 420) which have been substantially rehabilitated for commercial or industrial use. A discounted exemption shall apply to structures situated outside the historic zone (as defined in Chapter 420) which have been substantially rehabilitated for commercial or industrial use. For the purpose of this section, any structure shall be deemed commercial if the ground floor of the structure is primarily used for commercial purposes and has been substantially rehabilitated when it has been so improved as to increase the assessed value of the structure by no less than 40% without increasing the total volume thereof by more than 10%.

§ 366-34 Amount; computation; term.

A. The exemption authorized in this article shall be a credit against real estate taxes in an amount equal to the increase in assessed value resulting from the rehabilitation of the structure as determined by the Assessor, and this amount only shall be applicable to any subsequent assessment or reassessment. The credit hereby provided shall be applied as follows:

(1) For the first through the fourth years after rehabilitation the credit shall be 100%.

(2) For the fifth year after rehabilitation the credit shall be 80%.

(3) For the sixth year after rehabilitation the credit shall be 60%.

(4) For the seventh year after rehabilitation the credit shall be 40%.

(5) For the eighth year after rehabilitation the credit shall be 20%.

B. For rehabilitated structures lying outside the historic zone that otherwise meet the criteria for the exemption the credit shall be applied as follows:

(1) For the first through the fourth years after rehabilitation the credit shall be 75%.

(2) For the fifth year after rehabilitation the credit shall be 60%.

(3) For the sixth year after rehabilitation the credit shall be 45%.

(4) For the seventh year after rehabilitation the credit shall be 30%.

(5) For the eighth year after rehabilitation the credit shall be 15%.

C. The base value of the structure shall be the assessed value immediately prior to rehabilitation. The initial rehabilitated value shall be the assessed value after completion of the project. An increase in assessment occurring after the first year of such rehabilitation exemption shall not qualify for an increase in the exemption.

D. The exemption shall commence on July 1 of the tax (fiscal) year following completion of the rehabilitation and shall run with the real estate for the time period set forth above.

E. Nothing in the section shall be construed so as to permit the Commissioner of the Revenue to list upon the Land Book any reduced value due to the exemption provided herein.

§ 366-35 Application; eligibility requirements.

Exemptions pursuant to this article are hereby granted to owners of qualified property who comply with the following provisions:

A. The owner or his agent shall submit to the Commissioner of the Revenue an application requesting the exemption provided by this article prior to the performance of any work on the project. Such application shall not be deemed to be filed unless there is attached to the application a check for $100 payable to the City Treasurer to cover processing the application.

B. No property shall be eligible for such exemption unless the appropriate building permits have been acquired and the Commissioner of Revenue or his/her designee has verified that the rehabilitation indicated on the application has been completed.

C. The work done on the qualifying structure shall be the result of a single project, with all work undertaken pursuant to a single building permit or combination of permits completed within 24 months from the date the initial construction permit was issued.

§ 366-36 Assessor.

The Assessor, as used in this article, shall be the Commissioner of Revenue or a qualified real estate appraiser appointed by the City Manager specifically for the purpose of establishing the initial rehabilitated value for a specific project. "Assessor" also shall mean any person filling the office of City Assessor should such an office subsequently be established as a part of the City administration.

§ 366-37 Special coding of qualifying real estate.

The Commissioner of the Revenue shall specifically code and identify in the Land Book property which has qualified for the tax exemption provided in this article, which coding shall record the assessed value exempt from taxation and the years for which such exemption is applicable.