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Real Estate Rehabilitation and Renovation Program
This program grants real estate tax exemptions for eligible and qualified properties under rehabilitation/renovation. The tax exemption is equal to the increase in assessed value resulting from the substantial rehabilitation/ renovation of a structure as determined by the City Assessor. This program does not freeze taxes; however, the exemption is subtracted from the fair market value assessment before taxes are calculated.
Who can apply?
The person(s) in whose name the structure is titled or a lessee who is legally obligated to pay real estate taxes assessed against the structure.
What are the eligibility requirements?
The Lynchburg City Code Section 36.177 states that in order to be considered as substantial rehabilitation/ renovation, residential and multifamily (six units or more) real estate property, the existing structure must be fifty (50) years of age or older and the improvements to the existing structure increase the assessed value by forty (40) percent or more. For each residential and multifamily property that qualifies, the real estate tax exemption shall be effective for a period of fifteen (15) years commencing on July 1 for any work completed during the preceding fiscal year (July 1 – June 30).
For commercial or industrial real estate, the existing structure must be twenty-five (25) years of age or older and the improvements to the existing structure increase the assessed value by sixty (60) percent or more. For each commercial or industrial property that qualifies, the tax exemption shall be effective for a period of five (5) years commencing on July 1 for any work completed during the preceding fiscal year.
Per Lynchburg City Code Section 36.177.1, vacant lots within the Lynchburg Redevelopment Conservation Zones (see map) qualify under the City's Rehabilitation and Renovation Program, providing a seven (7) year exemption on single-family detached structures built on vacant land within these zones. For each property qualifying, the exemption will begin on July 1 for any work completed during the preceding fiscal year. The amount of the exemption is fifty percent (50%) of the assessed value of the new structure. Additionally, the structure must have an assessed fair market value, determined by the City Assessor, of at least 120% of the median value of the other single-family residences located within the neighborhood. The structures must also be architecturally compatible with the existing structures located within the neighborhood.
How do I apply?
Once the proper building permits are acquired and prior to the commencement of the work, the property owner must complete and file an application with the City Assessor’s Office. The application to qualify shall be effective for a period of two (2) years from the date of filing. No extensions of this time period will be granted. There is a non-refundable fee of $125.00 for processing each residential application and $250.00 for processing each multifamily, commercial or industrial application. Upon receipt of an application for rehabilitated/renovated real estate tax exemption, an appraiser from the City Assessor’s Office will make a physical inspection of the structure and determine the assessed base value of the structure. If work has been started prior to the first inspection, the base value will include any work started and will reflect the market value of the structure as of the date of the first inspection.
What else do I need to know?
- No exemption shall be granted if access to the entire property is denied to the City Assessor’s Office or the Inspection’s Division.
- Upon completion of the rehabilitation/ renovation, the owner of the property must notify the City Assessor in writing, and an appraiser from the City Assessor’s Office will physically inspect the property and perform an after-rehabilitation/ renovation appraisal to determine if it then qualifies for the real estate tax exemption.
- Upon determination that the property has been substantially rehabilitated/ renovated, the real estate tax exemption will become effective for the period as determined by the type of structure rehabilitated/renovated (see eligibility requirements).
- Prior to a determination that the property has been substantially rehabilitated/ renovated, the owner of the property will continue to be subject to taxation on the full value of the property.
- All taxes must be paid and current to be eligible for an exemption. If the City Assessor is notified by the Billings and Collections Division that the property is more than thirty (30) days delinquent on taxes, then the remainder of the exemption will be void.
- After rehabilitation/renovation is completed, multifamily residential structures will remain as such for the remainder of the exemption period.
- The property must be in compliance with all Lynchburg City Codes at all times. This includes, without limitation, the building code, the rental housing code, the zoning ordinance and all other codes that relate to real estate within the City of Lynchburg. Failure to correct the violation within the required time, as provided by the building inspector, will void the remainder of the exemption. If a structure is damaged or destroyed and found to be uninhabitable, the exemption will be terminated.
- Only one exemption may be active for a parcel at any given time.