Richmond Tax Abatement Program
Renovating older homes and improving real estate is good for states, counties, cities and neighborhoods. That’s why the city of Richmond has created a tax abatement program for qualifying home renovations in the redevelopment and conservation areas of the city. There are many neighborhoods that fall into these areas including sections of Randolph, The Fan, Church Hill, Musuem District, Jackson Ward and others.
This program aims to encourage the renovation and rehabilitation of older homes by saving homeowners who undergo a major renovation money on their taxes. The program is not a requirement for renovations of older homes in those neighborhoods, but it is a great way to offset some of the cost of renovation. At RIC design/build, we’ve renovated about a half a dozen homes under this program, all of which have saved the owners money in the long run. We are currently renovating two homes under this program and we have more in the works. We think it’s an excellent program that encourages the responsible renovation and rehabilitation (versus tear downs and rebuilds) of some of Richmond’s beautiful, historic homes.
To qualify for the program, the home renovation must:
be done on a home that is within the redevelopment and conservation area
be done on a home that is at least 20 years old
increase the value of the property by at least 40%
meet all zoning requirements and have all appropriate permits
the renovation must not increase the square footage of the home by more than 110%
If these requirements are met, homeowners are exempt from all or some of the property taxes on the increased value of the house for seven or ten years, depending on the location of the home. For instance, if a home is located in a neighborhood that qualifies for the 10 year abatement, and its initial value was $100,000 and after the renovation the assessed value was $150,000, that additional $50,000 would not be taxed at all for the first seven years, then in 25% increments for the last three years of the program until it reached 100% taxable value. This can save homeowners thousands, even tens of thousands of dollars over those seven to ten years.
In order to use the tax abatement program, homes must be assessed by the city prior to any work being done or else that work will fall under the existing value of the house, so if you are thinking about beginning a renovation, and your home is within the program’s geographic area, give us a call first. We have lots of experience with the program and can help walk you through the permits, applications and process. We can also work with you on the design, ensuring that the 40% value increase is met. To find out if your home is within the approved areas, visit the city of Richmond’s website where they have searchable map that you can type your address in to to see if it qualifies, as well as other information about the program.
Here is a home in Malvern Gardens that we renovated under the city's tax abatement program:
Base Value (before renovation) $66,000
Front Before
Back Before
Front After
Back After
Final Value (after renovation) $297,000
This is a home in the Museum District that is currently under construction and in the program. While the after value has not been determined yet, we are confident that the massive renovation will majorly increase the value of the property, while costing the homeowner no additional money in taxes for several years to come.
This home is a complete gut on the inside, but we will be restoring many of its historic properties.
Next door to the home a new property is being built that we designed.