RICHMOND, VA – A new proposal before the Virginia General Assembly would give every city and county in the Commonwealth the authority to tax land and improvements — such as buildings — at separate rates, expanding a system currently available only to a few localities.
House Bill 10, introduced by Delegate Joe McNamara and referred to the Committee on Finance, amends §58.1-3221.1 of the Code of Virginia to classify improvements to real property as a distinct category for taxation purposes in all localities, not just in the Cities of Fairfax, Poquoson, Richmond, and Roanoke.
Under the bill, any local governing body could, after providing public notice and a hearing, levy a different tax rate on buildings or structures than on the land beneath them. The rate on improvements, however, could not be set at zero or exceed the tax rate imposed on the land. The measure clarifies that this authority would not allow localities to alter property valuations, only the tax rates applied to each component.
Currently, split-rate property taxation is permitted only in limited jurisdictions. Expanding it statewide would give local governments greater flexibility to encourage development, redevelopment, or conservation, depending on local priorities. For example, some localities may choose to reduce taxes on improvements to incentivize construction while maintaining or increasing land tax rates to promote efficient land use.
If enacted, the bill would take effect for taxable years beginning on or after July 1, 2026.
Key Points: Virginia bill would let all localities tax land and buildings at different rates – Richmond
- HB10 expands authority to apply separate tax rates on land and improvements to all Virginia localities
- The measure aims to give cities and counties more control over property tax policy to support development goals
- The new taxation option would apply beginning with the 2026–2027 fiscal year