VA SB181

Authorizes Virginia localities to adopt ordinances providing partial real property tax exemptions for converting retail, commercial, or religious buildings (at least 15 years old) into residential use

Requires qualifying conversions to reserve at least 30% of residential units for households earning at or below 80% of the local median per capita income, or have a binding affordable housing agreement with the state or locality

Limits the partial exemption to the increase in assessed value from the conversion, not exceeding conversion expenses, and allows exemptions to run up to 15 years

Establishes recapture provisions allowing localities to recover tax exemptions if buildings no longer meet affordability requirements, with penalties for purchasers who discontinue compliance

Permits localities to offer additional incentives for qualifying conversions including reduced permit fees, streamlined permit approval processes, and reductions in gross receipts taxes