A BILL to amend and reenact § 58.1-3221.1 of the Code of Virginia, relating to real property tax; classification of land and improvements.
HB10 amends Virginia’s real property tax classification statute to expand and clarify which localities may treat improvements to real property as a separate class from the underlying land for local tax purposes. Under the bill, the authority currently listed for the Cities of Fairfax, Poquoson, Richmond, and Roanoke is broadened to apply to any locality, while preserving special language for Poquoson. The bill also allows the affected governing bodies, after public notice and a hearing, to levy a different tax rate on improvements than on the land they sit on.
The bill places limits on that differential rate. For most localities covered by the bill, the tax rate on improvements may not be zero and may not exceed the rate on the land. For Poquoson, the bill retains a separate provision allowing a different rate so long as it is not zero. The bill does not change how real property is valued, only how it may be classified and taxed, and it applies to taxable years beginning on and after July 1, 2026.
HB10 would amend § 58.1-3221.1 of the Code of Virginia to expand local taxing authority over real property improvements and to make the statute applicable to all localities rather than only the named cities, while preserving existing procedural requirements such as public notice and a hearing. It would affect local governments that choose to adopt a split-rate property tax structure, as well as property owners whose land and improvements could be taxed at different rates. The bill expressly leaves valuation rules unchanged and would take effect for taxable years beginning on or after July 1, 2026.
The available legislative history shows little recorded debate or formal vote activity, so there is no strong documented consensus or opposition in the materials provided. The bill was referred to the House Committee on Finance and was left in Finance, indicating it did not advance from committee at that stage. Based on the text alone, the measure appears to be a technical/local-tax policy change rather than a broadly controversial statewide initiative, but the lack of transcripts or votes limits any deeper assessment of sentiment.
The main point of potential contention is the expansion of split-rate property tax authority to any locality, which could be viewed as giving local governments more flexibility to shift tax burdens between land and improvements. Supporters would likely emphasize local control and the ability to tailor property tax policy, while opponents may worry about higher effective taxes on structures, administrative complexity, or uneven impacts on homeowners and businesses. Another possible issue is that the bill preserves a special rule for Poquoson while changing the general framework, which may raise questions about why some localities receive distinct treatment.