SENATE BILL NO. 138 Offered January 11, 2006 Prefiled January 10, 2006 A BILL to amend the Code of Virginia by adding a section numbered 58.1-3200.01, relating to fair market value for assessing real property. ---------- Patron-- O'Brien ---------- Referred to Committee on Finance ----------

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding a section numbered 58.1-3200.01 as follows:

§ 58.1-3200.01. Fair market value defined.

A. For purposes of this section:

"Assessment area" means a residential subdivision, residential development, commercial development, industrial area, or other area in which properties have similar qualities and characteristics such that it would be appropriate to treat all property located in the assessment area as comparables for real property assessment purposes, as determined by the local assessing officer.

"Percentage change in the average sales price" means the percentage increase or decrease in the average selling price for real property in the two most recent tax years for which information is available.

B. Except as otherwise specifically provided under the Code of Virginia:

1. The fair market value for purposes of assessing real property shall be the actual sales price of the real property if the property was sold in an arms-length transaction in the immediately preceding tax year.

2. If the real property was not so sold in the immediately preceding tax year, the fair market value of such property shall be determined by applying the percentage change in the average sales price for the real property located in the same assessment area, unless such property was improved in the immediately preceding tax year, in which case the fair market value of such property shall be determined by applying the percentage change in the average sales price and adding thereto the value of the improvements.