A. Whenever any building or land, or part thereof, exempt from taxation pursuant to this chapter and not belonging to the Commonwealth is a source of revenue or profit, whether by lease or otherwise, all of such buildings and land shall be liable to taxation as other land and buildings in the same county, city or town. When a part but not all of any such building or land, however, is a source of revenue or profit, and the remainder of such building or land is used by any organization exempted from taxation pursuant to this chapter for its purposes, only such portion as is a source of profit or revenue shall be liable for taxation.
B. In assessing any building and the land it occupies pursuant to subsection A, the assessing officer shall only assess for taxation that portion of the property as is a source of profit or revenue and the tax shall be computed on the basis of the ratio of the space as is a source of profit or revenue to the entire property. When any such property is leased for portions of a year the tax shall be computed on the basis of the average use of such property for the preceding year.
C. In determining whether any building or land, or part thereof, is a source of revenue or profit, rent from the lease of the property applied to reduce indebtedness against the property by payment of the principal of an outstanding bond or note held by a political subdivision of the Commonwealth shall not constitute revenue or profit, provided that the property is leased to a lessee who is exempt from taxation pursuant to § 501(c)(3) of the Internal Revenue Code and is used by such lessee exclusively for charitable purposes.
D. Any rental income or other sources of income received from any portion of real property that is used for charitable or benevolent purposes in accordance with subdivision A 2 of § 58.1-3651 shall not be considered a source of revenue or profit for purposes of this section.
Code 1950, §§ 58-14, 58-16; 1950, p. 659; 1984, c. 675; 1996, c. 534; 2026, c. 683.
Notes of Decisions
Mariner's Museum v. City of Newport News, 495 S.E.2d 251 (Va. 1998).
· cites it 18× “It asserted “that the aforesaid real estate is leased or was otherwise a source of substantial revenue or profit” to the Museum and, accordingly, it is liable to taxation pursuant to Code § 58.1-3603. *43 The parties entered into a stipulation of facts and submitted the case to…”
Cnty. of York v. Peninsula Airport Comm'n, 369 S.E.2d 665 (Va. 1988).
· cites it 4× “Citing former Code § 58-14 (now, Code § 58.1-3603), 2 the County asserts that “[e]ven if the property of PAC is otherwise lawfully exempt from taxation, the leased portion lost its exempt status when it was leased.”
City of Richmond v. Virginia United Methodist Homes, Inc., 509 S.E.2d 504 (Va. 1999).
· cites it 2× “2d 876, 881 (1964); see also Code § 58.1-3603. 5 Nothing in this opinion should be interpreted as restricting Methodist Homes from obtaining a legislative exemption from local taxes by designation under Code § 58.”
Richmond Mem'l Hosp. v. City of Richmond, 55 Va. Cir. 308 (Richmond County Cir. Ct. 2001).
· cites it 9× “1-3906, Va. Code § 58.1-3603 serves to lift that eligibility if die property in question is a source of revenue or profit.”
Emmanuel Worship Ctr. v. The City of Petersburg, 80 Va. App. 100 (Va. Ct. App. 2024).
· cites it 4× “The effect of that omission is not before us, but we note that Code § 58.1-3603(A) currently provides that “[w]hen a part but not all of any such building or land .”
Va. Code Ann. § 58.1-3603(A): 3 cases
Mariner's Museum v. City of Newport News, 495 S.E.2d 251 (Va. 1998).
“It asserted “that the aforesaid real estate is leased or was otherwise a source of substantial revenue or profit” to the Museum and, accordingly, it is liable to taxation pursuant to Code § 58.1-3603. *43 The parties entered into a stipulation of facts and submitted the case to…”
Emmanuel Worship Ctr. v. The City of Petersburg, 80 Va. App. 100 (Va. Ct. App. 2024).
“The effect of that omission is not before us, but we note that Code § 58.1-3603(A) currently provides that “[w]hen a part but not all of any such building or land .”
Va. Code Ann. § 58.1-3603(B): 1 case
Mariner's Museum v. City of Newport News, 495 S.E.2d 251 (Va. 1998).
“It asserted “that the aforesaid real estate is leased or was otherwise a source of substantial revenue or profit” to the Museum and, accordingly, it is liable to taxation pursuant to Code § 58.1-3603. *43 The parties entered into a stipulation of facts and submitted the case to…”
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