It is very important for the organization to complete both the Application for Real Estate Tax Exemption for Qualifying Classifications or Designations (PDF) and the affidavit in full. Both documents must be notarized. Please include on the application and the affidavit the name of the person who is to be considered the contact person during the application process.
The exempt classification, or real estate not subject to taxation, applies to real estate owned and exclusively used by organizations that meet the specific state mandates (churches, lodges, civic and educational associations, federal, state and local governments, etc.).
The Code of Virginia sets out that exemption is the exception and that exemptions are to be strictly construed. If there is any doubt, the doubt must be resolved against the party claiming the exemption. The owner of the property has the burden of proving that the property meets the qualifications for the exemption.
Property owned by a church or religious organization is not automatically exempt from taxation based solely on the fact that the property is owned by a church or religious organization. This is in accordance with Article X, § 6(a)(2) and 6(a)(6) of the Constitution of Virginia and the Code of Virginia Title Taxation § 58.1 – 3606 and 3617.
Property owned by a church must be actively and exclusively used for charitable, religious or educational purposes to qualify for real property exemption. When qualifying uses are limited to a portion of a parcel, only that portion being actively and exclusively used for religious purposes will be granted exemption.
A field inspection of the subject properties will be conducted as a part of the application process to assist in accurately defining the classification of the property. Should there be vacant land (no structures) but use has been claimed by the organization, physical evidence of the stated use and the amount of area for the designated use will be verified. Example: Trails for prayer and meditation need to be physically well defined and easily accessible for all who use it. Trails need to be included as a part of the site plan and should include the amount of acreage included and their geographic location on the property. If trails are developed on a parcel that has already been developed and is an addition to the current use of a parcel, a separate site plan containing the amount of acreage included in the trail and the geographic location of the trails is to be submitted.
Property Owner Responsibilities
The property owner is responsible for reporting the detailed uses of the property in accordance with the Code of Virginia as well as the amount of land that is attributable to each specified use. (Example: a church owns a 5‐acre parcel of land. 0.250 acres constitutes the area of the parcel where the church and education buildings are positioned; 2.5 acres are used for parking; 1 acre for youth and children’s activities consisting of a ball field, playground and picnic area and the remaining 1.25 acres of the parcel is not being used for religious purposes.) In this example, 3.75 acres would be granted exemption and 1.25 acres would remain in a taxable classification and assessed at fair market value.
When an organization is planning to build a church or related building (for example, a family center) that would qualify for exemption once in use, the following is the minimum criteria for beginning the application process:
- Actual site work must have begun (grading)
- Approved site plan
- Issuance of building permits
Construction must be completed within a reasonable time frame. In the case of new construction or renovation that will qualify for exemption, the exemption will be processed when the organization commences qualifying use of the property, but the exemption will be made retroactive to the commencement of construction.