Henrico OKs tax break for renovating older homes

Henrico County supervisors approved a proposal this week that will allow older and lower-value homes in the county to qualify for a tax break on major renovations starting Jan. 1.

To qualify for the partial tax exemption, homes must be at least 40 years old and assessed at no more than $200,000. Renovations or additions must increase the value of the house by at least 20 percent but not increase the size of the house more than 100 percent.

The 20 percent increase in value applies to the structure only. Improvements to detached structures, such as garages, sheds or swimming pools, are not eligible. If a property is assessed at $200,000 and the house has a value of $150,000, the minimum house improvement to qualify for the tax exemption would be $30,000.

The owner of the property also needs to file a rehabilitated structure tax exemption application with the county's finance department before or during the time of seeking the appropriate building permits.

Owners would be exempt from any increases in real estate taxes because of the improvements for seven years.

More than one in four homes in the county -- 23,397 homes -- would qualify for the program, said John A. Vithoulkas, the county's director of finance.

The partial tax exemption would encourage builders and others to make improvements in the county's older neighborhoods, county officials said.

Areas that could benefit include Beverly Hills, where the average assessment is $184,500 and the average house is 54 years old; Regency Park/Farmington, $184,200 and 49 years; Ridgehaven, $169,800 and 52 years; Lakeside, $167,100 and 57 years; Sandston/Seven Pines, $149,200 and 52 years; and Laburnum Avenue West, $86,400 and 63 years.

Through the program, the county is recognizing the value of its older neighborhoods and offering an opportunity to invest in those neighborhoods, Vithoulkas said.

"There is clearly an economic impact," he said, noting the effort to help spread some construction in the county, which has not seen much residential improvement lately.

Contact Luz Lazo at (804) 649-6058 or .