Virginia 2024 Regular Session Status: In Committee

HB 1446 — Real property tax; assessment of real property used for affordable housing.

Last action — Continued to 2025 with substitute in Finance (12-Y 9-N)

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  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed House of Delegates
  4. 4
    Passed Senate
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 2024 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Summary

Real property tax; assessment of real propertyused for affordable housing. Requires the duly authorized real estate assessor of a locality to appraise affordable rental housingin accordance with the income approach, as described by the bill.The bill provides that, should the duly authorized real estate assessorfail to follow generally accepted appraisal practices, the assessmentwill not be entitled to a presumption of correctness, and if theowner then successfully appeals such assessment, the locality shallreimburse the owner for attorney fees and costs incurred.

Bill Text

What changed in the latest version

133 added · 148 removed

Plain-language change summary

The amended bill, HB 1446, updates the language regarding how real property used for affordable housing is assessed for taxes in Virginia. Notable changes include clarifications of key terms like "income and expense statements" and "short-term lease," and a focus on using expert appraisers when determining fair market value. These adjustments are designed to ensure that assessments fairly reflect the economic realities of affordable housing, which can help lower property tax burdens for developers and ultimately make housing more accessible. Simplifying these definitions and processes helps provide more transparency and consistency in assessments.

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SESSION INTRODUCED 24104281D I HOUSE BILL NO.
SESSION HOUSE SUBSTITUTE 24107217D AMENDMENT IN THE NATURE OF A SUBSTITUTE (Proposed by the House Committee on Finance on February 7, 2024) (Patron Prior to Substitute––Delegate Coyner) A BILL to amend and reenact § 58.1-3295 of the Code of Virginia, relating to real property tax;
1446 Offered January 18, 2024 N A BILL to amend and reenact § 58.1-3295 of the Code of Virginia, relating to real property tax;T assessment of real property used for a––––––––––housing.
assessment of real property used for affordable housing.
R Patrons––Coyner, Runion and Cousins –––––––––– O Referred to Committee on Finance D –––––––––– Be it enacted by the General Assembly of Virginia:
Be it enacted by the General Assembly of Virginia:
U 1.
1.
That § 58.1-3295 of the Code of Virginia is amended and reenacted as follows:
§ 58.1-3295.
C § 58.1-3295.
affordable housing.
affordable housing.cted as follows:
A.
For purposes of this section:
E "Owner" means the owner of record of the real property and the owner's agent, except that for purposes of subdivision B 6, "owner" means the owner of record of the real property and any person assessed with local taxes who is aggrieved by the assessments in issue.
"Normal course of business" means any operation or action that represents a daily and common action, carried out on a reasonable and professional basis, in conformity with the actions of other appraisers who have expertise and competency in a similar type of assignment and by the expectaOions of "Owner" means the owner of record of the real property and the owner's agent, except that for purposes of subdivision B 5, "owner" means the owner of record of the real property and any person assessed with local taxes who is aggrieved by the assessments in issue.
"Short-term lease" means a rental lease agreement of two years or less.
S "Short-term lease" means a rental lease agreement of two years or less.
Notwithstanding any other provision of law, in determining the fair market value of real property operated in whole or in part as affordable rental housing, in accordance with the provisions of (i) 26 § 221(d)(3), the federal Rental Assistance Demonstration program established under the Consolidated and Further Continuing Appropriations Act, 2012 (P.L.
1.
Notwithstanding any other provision of law, in determining the fair market value of reEl (i) 26 U.S.C.
§ 42, 26 U.S.C.
§ 142(d), 24 C.F.R.
§ 983, 24 C.F.R.
§ 236, 24 C.F.R.
§ 241(f), 24 C.F.R.f § 221(d)(3), the federal Rental Assistance Demonstration program established under the Consolidated and Further Continuing Appropriations Act, 2012 (P.L.
(ii) applicable state law;
(ii) applScable state law;
or (iii) local ordinances adopted by the locality wherein such real property is loca4ed, the duly authorized real estate assessor shall consider:
or (iii) local ordinances adopted by the locality wherein such real property is located, the duly authorized real estate assessor shallconsider:
6 1.
U 1.
B 3.
The actual operating expenses and expenditures and the impact of any such additional expenses ord expenditures.
If an owner has two or more units of real property that (i) are operated in whole or in part as affordable rental housing and (ii) are controlled by a single restrictive use agreement regulating income and rent restrictions, and the owner has expenses and expenditures common to two or moreIsuch 35 units, and such expenses and expenditures cannot practicably be attributed to a particular unit, then the 36 owner has a right to have the assessor make a pro rata apportionment of such expenses and expenTitures 38 such units.
The provisions of this subdivision apply whether or not the units are in one tax parcel orll 39 multiple tax parcels only use the income approach, and in using the income approach, shall comply fully 40 and completely with Standards Rule 1-4(c) of the Uniform Standards of Professional Appraisal Practice.
Restrictions on the transfer of title or other restraints on alienation of the real property;
In performing the income approach, the duly authorized real estate assessor shall collectE verify, and analyze such data as is available to the duly authorized real estate assessor in the normal course of business and as is necessary and appropriate to estimate rates of capitalization or rates of discount.
and 3.
In collecting, verifying, and analyzing such data, the duly authorized real estate assessor shall analyze and cash flow, and related factors on the fair market value of the real property.
The actual operating expenses and expenditures and the impact of any such additional expenses or expenditures.
In estimating rates ofate of capitalization, the duly authorized real estate assessor shall give preference to the use of the band of investment technique.
If an owner has two or more units of real property that (i) are operated in whole or in part income and rent restrictions, and the owner has expenses and expenditures common to two or more suchg units, and such expenses and expenditures cannot practicably be attributed to a particular unit, then the owner has a right to have the assessor make a pro rata apportionment of such expenses and expenditures to each such unit based on each unit's assessed value as a percentage of the total assessed value of all 35 such units.
To the extent the duly authorized real estate assessor collects, verifies, and analyzes capitalization rates extracted from market sales transactions, the properties that areHthe subject of the sale transactions shall be highly comparable to the real property, including comparabili1y of property type, remaining economic life, operating expense ratios, physical condition, ratios of4 characteristics of risk, timing, stability, and income projection pattern, terms of sale, types of financing, types of buyers, including those with motivations the same as the most probable type of buyer for the subject property, and market conditions at the time of sale and time of assessment.
The provisions of this subdivision apply whether or not the units are in one tax parcel or 36 multiple tax parcels shall only use the income approach as provided herein.
/ 37 1.
The duly authorized real estate assessor shall first determine whether the property to be assessed 38 is encumbered by short-term leases at rents that are reflective of market conditions.
If the property is so arrive at the property's assessment.
If the property is encumbered by leases with contract rents that differ from market rents, the duly authorized real estate assessor may use the yield capitalization technique to arrive at the property's assessment.
2.
In using the income approach to arrive at assessments of affordable rental housing properties, the duly authorized real estate assessor shall:
a.
Collect, verify, and analyze (i) such rental data of comparable affordable rental housing properties as is available to the duly authorized real estate assessor in the normal course of business and (ii) the potential earnings capacity of the real property as is necessary and appropriate to estimate affordable housing rental property shall not be considered real property or income attributable to the real property;
b.
Collect, verify, and analyze (i) such operating expense data of comparable affordable rental housing properties as is available to the duly authorized real estate assessor in the normal course of business and (ii) the actual operating expense data for the real property as is necessary and appropriate to estimate the operating expenses of the real property;
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c.
Base projections of future income potential and operating expenses for the real property on reasonably clear and appropriate evidence;
events such as competition from developments under construction when developing or reconstructing HB1446 2 of 3 income and expense statements and cash flow projections for the real property;
e.
Collect, verify, and analyze occupancy rates for comparable affordable rental housing properties as are available to the duly authorized real estate assessor in the normal course of business and as are necessary and appropriate to estimate the stabilized occupancy of the real property;
f.
Collect, verify, and analyze replacement reserves for comparable affordable rental housing properties as are available to the duly authorized real estate assessor in the normal course of business and as are necessary and appropriate to estimate the costs to repair or replace buildings or make other improvements to meet governing regulatory requirements;
g.
Collect, verify, and analyze such data as is available to the duly authorized real estate assessor in the normal course of business and as is necessary and appropriate to estimate rates of capitalization or rates of discount for use in an income approach to assess the real property.
In collecting, verifying, and analyzing such data, the duly authorized real estate assessor shall analyze and account for the influence of the real property's locational characteristics, condition, occupancy, rate of cash flow, and related factors on the fair market value of the real property.
In estimating rates of capitalization, the duly authorized real estate assessor shall give preference to the use of the band of investment technique.
To the extent the duly authorized real estate assessor collects, verifies, and analyzes capitalization rates extracted from market sales transactions, the properties that are the subject of the sale transactions shall be highly comparable to the real property, including comparability of property type, remaining economic life, operating expense ratios, physical condition, ratios of land-to-improvements as proportions of total property value, income streams, terms of sale, types of financing, types of buyers, and market conditions at the time of sale and time of assessment.
The use of capitalization rates extracted from sales of affordable rental housing properties in urban or metropolitan areas to value affordable rental housing properties in rural areas is prohibited;
The use of capitalization rates extracted from sales of affordable rental housing properties in urban or metropolitan areas to value affordable rental housing properties HB1446H1 2 of 3 in rural areas is prohibited.
and h.
Notwithstanding any other provision of this section, the duly authorized real estate assessor shall collect, verify, and analyze other potential influences on the fair market value of the real property, including the real property's current use, the real property's actual income and operating expenses, the real property's income restrictions, preservation agreements governing or applicable to the real property, physical needs assessments and inspections of the real property by regulatory agencies, and restrictions on the transfer of title to the real property or other restraints on alienation of the real property.
Notwithstanding any other provision of this section, the duly authorized real estate assessor shall collect, verify, and analyze other potential influences on the fair market value of the real property, including the real property's current use, the real property's income restrictions, preservation agreements governing or applicable to the real property, physical needs assessments and inspections of the real property by regulatory agencies, and restrictions on the transfer of title to the real property or other restraints on alienation of the real property.
Federal or state income tax credits with respect to affordable housing rental property shall not be considered real property or income attributable to the real property.
A duly authorized real estate assessor request for income and expense statements under this section shall be limited to such information for the time periods that are necessary and appropriate to the performance of an income approach in accordance with generally accepted appraisal practices, procedures, rules, and standards as prescribed by nationally recognized professional appraisal organizations and Virginia law relating to the valuation of real property.
A duly authorized real estate assessor's request for income and expense statements under this section shall be limited to such information for the time periods that are necessary and appropriate to the performance of an income approach in accordance with generally accepted appraisal practices, procedures, rules, and standards as prescribed by nationally recognized professional appraisal organizations and Virginia law relating to the valuation of real property.
B.
The owner of real property that is operated in whole or in part as affordable rental housing in accordance with the definition of affordable rental housing established by ordinance or resolution of the locality in which the real property is located may make an application to the locality duly authorized real estate assessor to have the real property assessed pursuant to this section.
a.
Notwithstanding the exception in § 58.1-3294 for an owner of four or fewer residential units, upon Upon application by such an owner, the duly authorized real estate assessor may require the owner to furnish to such assessor, board, or department statements of the income and expenses attributable over a specified period of time to each such parcel of real estate in the manner required by § 58.1-3294 and to comply with all provisions of § 58.1-3294 applicable to properties with more than four rental dwelling units provide income and expense statements for the duly authorized real estate assessor's use in arriving at the assessment of the real property.
The duly authorized real estate assessor shall understand the various affordable rental housing subsidy programs, affordable rental housing definitions, the various restrictions, risks, and benefits associated with ownership of affordable rental housing properties, relevant tax considerations related to affordable housing, local market conditions affecting affordable rental housing properties, and anticipated changes in the market for affordable rental housing properties that may affect the quality, quantity, or durability of the various restrictions, risks, and benefits associated with ownership of affordable rental housing properties.
A duly authorized real estate assessor's request for income and expense statements under this subsection shall be limited to such information for the time periods that are necessary and appropriate to the performance of an income approach in accordance with generally accepted appraisal practices, procedures, rules, and standards as prescribed by nationally recognized professional appraisal organizations and Virginia law relating to the valuation of real property.
b.
The application shall be granted by the locality duly authorized real estate assessor if (i) the owner charges rents at levels that meet the locality's definition of affordable housing and (ii) the real property does not have any pending building code violations at the time of the application.
The duly authorized real estate assessor shall maintain and provide the owner or its agent with prompt access to all the materials collected, verified, or analyzed in arriving at the owners' assessments.
The duly authorized real estate assessor shall also consider evidence presented by the property owner of 3 of C.
If the duly authorized real estate assessor fails or refuses to provide the owner or its agent with prompt access to all the materials collected, verified, or analyzed in arriving at the assessment of the real property, the locality will be prohibited from using any of the materials that may have been collected, verified, or analyzed in defending an assessment against a property owner's assessment appeal.
c.
If the duly authorized real estate assessor fails or refuses to make appropriate efforts in accordance with generally accepted appraisal practices, procedures, rules, and standards prescribed by nationally recognized professional appraisal organizations to obtain the materials necessary to arrive at assessments of affordable rental housing properties in accordance with the provisions of this section, and if the owner prevails in its appeal to a board of review, board of equalization, or circuit court, the locality shall reimburse the owner for its reasonable attorney fees and costs incurred in bringing and prosecuting the appeal.
B.
The owner of real property that is operated in whole or in part as affordable rental housing in accordance with the definition of affordable rental housing established by ordinance or resolution of the locality in which the real property is located may make an application to the locality to have the real property assessed pursuant to this section.
Notwithstanding the exception in § 58.1-3294 for an owner of four or fewer residential units, upon application by such an owner, the duly authorized real estate assessor may require the owner to furnish to such assessor, board, or department statements of the income and expenses attributable over a specified period of time to each such parcel of real estate in the manner required by § 58.1-3294 and to comply with all provisions of § 58.1-3294 applicable to properties with more than four rental dwelling units.
The application shall be granted by the locality if (i) the owner charges rents at levels that meet the locality's definition of affordable housing and (ii) the real property does not have any pending building code violations at the time of the application.
The duly authorized real estate assessor shall also consider evidence presented by the property owner of other restrictions imposed by law that impact the variables set forth in this subsection.
C.
For property where only a portion of the units are operated as affordable housing, as defined in § 42 of the Internal Revenue Code or as required by state law or applicable local ordinance, onTy the portion determined to be affordable housing shall be subject to this section.
For property where only a portion of the units are operated as affordable housing, as defined in § 42 of the Internal Revenue Code or as required by state law or applicable local ordinance, only the portion determined to be affordable housing shall be subject to this section.
this section that is generating income as affordable housing shall be assessed using the income approach based on:
E.
the property's current use, income restrictions, provisions of any arm's-length contract including but not limited to restrictions on the transfer of title or other restraints on alienDtion of the real property, the requirements of subsection B, and all other provisions of this section.
Notwithstanding any other provision in this section or other law, the real property governed by this section that is generating income as affordable housing shall be assessed using the income approach based on:
6.
the property's current use, income restrictions, provisions of any arm's-length contract including but not limited to restrictions on the transfer of title or other restraints on alienation of the real of 3 12property, the requirements of subsection B, and all other provisions of this section.
a.
H O U S E U B S T T U T E H 1
The duly authorized real estate assessor shall understand the various affordable rentaU housing associated with ownership of affordable rental housing properties, relevant tax considerations related to affordable housing, local market conditions affecting affordable rental housing properties, andE anticipated changes in the market for affordable rental housing properties that may affect the quality, quantity, or durability of the various restrictions, risks, and benefits associated with ownership of affordable rental housing properties.
affordable rental housing with prompt access to all the materials collected, verified, or analyzed in arriving at the owners' assessments.
If the duly authorized real estate assessor fails or refuses to provide the owner or its agent with prompt access to all the materials collected, verified, or analyzed in defending an assessment against a property owner's assessment, the locality will be prohibited from using any of the materials that may have been collected, verified, or analyzed in defending an assc.
If the duly authorized real estate assessor fails or refuses to make appropriate efforts in accordance with generally accepted appraisal practices, procedures, rules, and standards prescr4bed by nationally recognized professional appraisal organizations to obtain the materials necessary to6arrive at assessments of affordable rental housing properties in accordance with the provisions of this section, (i) the resulting assessment will not be entitled to a presumption of correctness, and upon appeal of the only need to prove that the assessment is in excess of the subject property's fair market value or that the assessment is not uniform in its application in order to prevail in the appeal and (ii) if the owner prevails in its appeal to a board of review, board of equalization, or circuit court, the locality shall reimburse the owner for its reasonable attorney fees and costs incurred in bringing and prosecuting the appeal.
provisions of this section control.tion that is in direct conflict with any other section in this title, the
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Action History

  1. Continued to 2025 with substitute in Finance (12-Y 9-N)

  2. Committee substitute posted to LIS only 24107217D-H1

  3. Subcommittee recommends reporting with substitute (6-Y 2-N)

  4. House subcommittee amendments and substitutes offered

  5. Assigned Finance sub: Subcommittee #2

  6. House subcommittee amendments and substitutes offered

  7. Impact statement from TAX (HB1446)

  8. Referred to Committee on Finance

  9. Presented and ordered printed 24104281D

Sponsors

Sponsorship breakdown

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1 sponsors · 2 co-sponsors · 145 not signed on · 10 voted No

Sponsors (1)

Co-sponsors (2)

Not signed on (145)

145 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

Continued to 2025 with substitute in Finance (12-Y 9-N)

Passed 12 Yea · 9 Nay · 1 Other
Party YeaNayPresentNot Voting
Unaffiliated 12901
Total 12901
% of votes cast 55%41%0%5%
How each member voted (22)
Member Party Vote
Amy J. Laufer — Yea
Bonita G. Anthony — Yea
Chris S. Runion — Nay
Debra D. Gardner — Yea
Elizabeth B. Bennett-Parker — Yea
Fowler, Hyland F."Buddy," Jr. — Nay
Freitas, Nicholas J. — Nay
Joseph P. McNamara — Nay
Karen Keys-Gamarra — Yea
Kathy K.L. Tran — Yea
Katrina Callsen — Yea
Kent, Hillary Pugh — Nay
Mundon King, Candi — Yea
Orrock, Robert D., Sr. — Nay
Phil M. Hernandez — Yea
R. Lee Ware — Not Voting
Richard C. "Rip" Sullivan, Jr. — Yea
Shelly A. Simonds — Yea
Thomas A. Garrett, Jr. — Nay
Vivian E. Watts — Yea
Wendell S. Walker — Nay
Will Davis — Nay

Official roll call →

Subcommittee recommends reporting with substitute (6-Y 2-N)

Passed 6 Yea · 2 Nay · 1 Other
Party YeaNayPresentNot Voting
Unaffiliated 6201
Total 6201
% of votes cast 67%22%0%11%
How each member voted (9)
Member Party Vote
Amy J. Laufer — Yea
Bonita G. Anthony — Nay
Elizabeth B. Bennett-Parker — Yea
Katrina Callsen — Yea
Orrock, Robert D., Sr. — Yea
R. Lee Ware — Nay
Richard C. "Rip" Sullivan, Jr. — Not Voting
Vivian E. Watts — Yea
Wendell S. Walker — Yea

Official roll call →

Subjects

taxation housing
Cross-referencing the record. Reading this bill against every other bill in the corpus by meaning, not keywords. Only the first open is slow. It’s instant for you after this. Matching · Ranking · Engrossing

Frequently asked questions

What does HB 1446 do?
Real property tax; assessment of real propertyused for affordable housing. Requires the duly authorized real estate assessor of a locality to appraise affordable rental housingin accordance with the income approach, as described by the bill.The bill provides that, should the duly authorized real estate assessorfail to follow generally accepted appraisal practices, the assessmentwill not be entitled to a presumption of correctness, and if theowner then successfully appeals such assessment, the locality shallreimburse the owner for attorney fees and costs incurred.
Who sponsors HB 1446?
HB 1446 is sponsored by Chris S. Runion, Rae Cousins, and Coyner, Carrie E..
What is the current status of HB 1446?
This bill died with 2024 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track HB 1446?
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