The tax line on a new-construction closing can look like a bargain. Often it is only the lot, because the house was not on the books yet.
Why is the tax proration on a Richmond new build so low? Because localities usually value property as of the assessment date, often January 1, when the parcel may still have been land only. Closing prorates that known bill. If the locality has adopted Va. Code § 58.1-3292, a later partial-year assessment can bill the finished house for the rest of the year.
Buyers in Henrico, Chesterfield, Hanover, Midlothian, Short Pump, Mechanicsville, Moseley, Glen Allen, and the City of Richmond see the same pattern: a small tax figure on the closing disclosure, then a larger real estate tax bill, an escrow shortage letter, or both. Current Richmond-area property tax rates by county belong on a different page. This article covers why the closing split can understate the finished house, when a mid-year reassessment can follow, and what to ask before you sign.
The short version: 3 moving parts
- Assessment-date value. Many localities value the parcel as of January 1. If the house was not substantially complete that day, the books may still show land only.
- Closing proration from the last known bill. Settlement agents usually split that recorded bill between seller and buyer. On a new build, the seller is often the builder, and the only bill on file can be the land-only figure.
- Possible mid-year reassessment of the finished building. Where the locality has adopted an ordinance under Va. Code § 58.1-3292, the assessor can enter the completed building’s fair market value when it is substantially completed or fit for use and occupancy prior to November 1, then bill a partial-year tax. That bill, and any escrow true-up, is separate from the closing proration.
Think of it like paying the restaurant tab from yesterday’s menu price while the kitchen finished the entree after you sat down. Closing uses the bill everyone can see. The supplemental assessment is the bill that was not written yet.
What Va. Code § 58.1-3292 says
Virginia does not automatically bill every finished new home mid-year. § 58.1-3292 applies in a county, city, or town that has not adopted the separate NOVA rule in § 58.1-3292.1, and only after that locality adopts an ordinance that turns the statute on.
Opened on LIS on 2026-11-05, the statute says, in substance:
- New buildings substantially completed or fit for use and occupancy prior to November 1 of the year of completion shall be assessed when so completed, and the commissioner of the revenue shall enter the fair market value.
- No partial assessment becomes effective until the date and amount are recorded with the collecting official and made available for public inspection.
- That year’s tax is (i) tax on the completed-building assessment × the portion of the year after completion, plus (ii) tax on the January 1 condition × the portion before.
- If the assessment is made after September 1, the penalty for nonpayment by December 5 extends to February 5 of the next year.
“Substantially completed or fit for use and occupancy” is the statute’s phrase. It is not closing day, move-in day, or a sales-rep verbal. Ask the local assessor what date it used for the parcel.
§ 58.1-3292.1 is a different statute. It names Arlington, Fairfax, Loudoun, Prince William, and listed Northern Virginia cities, and it allows assessment regardless of the November 1 date. Greater Richmond buyers should not treat § 58.1-3292.1 as their governing rule.
Locality differences
Ordinance cells we could not open on Municode (HTTP 403 on 2026-11-05) are called out in the Ask column. Unknown practice says ask, not no.
| Locality | Ordinance / cite | Assessment timing published | Regular RE dues | Supplemental / new-building notes | Ask |
|---|---|---|---|---|---|
| Hanover | Code § 22-8 ; Tax Due Dates; Tax Billing Information | January 1 base in § 22-8 math (snippet) | June 5 / October 5 | Monthly “Supplemental billing for personal property and real estate tax” on the 5th; RE 1st, 2nd, and supplemental bills mailed 30 days before due. Pages do not define which events trigger a RE supplement. | 804-365-6000 |
| Chesterfield | Code § 9-14.1 ; Assessments; Treasurer | Values as of Jan. 1; notices by Feb. 1; 2026 rate $0.89 / $100 | June 5 / December 5 (2026 2nd half observed Mon., Dec. 7, 2026) | Assessor and Treasurer pages opened do not describe mid-year NC supplemental billing. Districts / CDA listed separately. | Assessor 804-748-1321; Treasurer 804-748-1201 |
| Henrico | Ch. 20 PDF: 0 hits for 58.1-3292 / “substantially completed” (2026-11-05). Ordinance status not confirmed; ask. | Annual reassessment effective January 1 | June 5 / December 5 | Notices to owner; bills typically to mortgage company. Cooper Center lists Prorate Yes (secondary only). | 804-501-4300 |
| City of Richmond | ORD. 2024-130 amends § 26-105; Finance; Assessor Forms / Appeal Process | Sources disagree. Finance: January 1 value. Assessor Appeal Process: notices on/about July 1; value as of July 1. ORD. 2024-130 §4 (in force July 1, 2026): July 1 assessment; § 26-105 May 1 cutoff / July 1 base. | Finance: January 14 / June 14 | Forms: Assessment Value Change Review for “supplement, roll correction, or rehab.” Confirm cutoff and base for the reader’s completion date. | Assessor 804-646-7500; RVA311 / 804-646-7000 |
Hanover County
Tax Due Dates lists 1st half real estate on June 5, 2nd half on October 5, and “5th of each month – Supplemental billing for personal property and real estate tax.” Tax Billing Information says real estate 1st, 2nd, and supplemental bills are mailed 30 days before the due date. Ask whether a newly completed house is billed on that monthly cycle.
Hanover Code § 22-8 (WebSearch Municode snippet, 2026-11-05) tracks the statewide model: substantially completed or fit for use, occupancy, and enjoyment prior to November 1; January 1 base in the two-part math; assessments after September 1 extend the October 5 nonpayment deadline to February 5.
Chesterfield County
Real Estate Assessments reassesses annually; notices by Feb. 1 for values as of Jan. 1; 2026 rate $0.89 per $100. Treasurer: June 5 and December 5, with the 2026 second half observed Monday, Dec. 7, 2026. Neither page describes mid-year new-home assessment.
Code § 9-14.1 (WebSearch Municode snippet, 2026-11-05) adopts Va. Code § 58.1-3292: November 1 cutoff; January 1 base; after-September 1 assessments extend the December 5 penalty to February 5. Ask Assessor 804-748-1321 and Treasurer 804-748-1201 for timing and mail path. The Assessments page also lists special assessment districts and the Lower Magnolia Green CDA (different charge; see below).
Henrico County
Annual reassessment effective January 1; dues June 5 and December 5; reassessment notices to the owner; tax bills typically to the mortgage company; appeals no later than April 1; phone 804-501-4300.
Henrico Code Chapter 20 PDF, opened 2026-11-05, had 0 hits for 58.1-3292 and 0 for “substantially completed” as a new-building rule. Cooper Center lists Henrico Prorate Yes as a secondary flag only. Ask 804-501-4300 how mid-year completions are billed before you budget for a supplement.
City of Richmond
Each City source is reported as published. They do not currently line up into a single public rule.
Finance (Real Estate and Important Dates, 2026-11-05): rate $1.20 per $100; January 1 value established; dues January 14 and June 14; 10% penalty and 10% annual interest after the due date. Contact via RVA311 / 804-646-7000.
Assessor Appeal Process: notices mail on/about July 1; “effective date of value as of July 1.”
Assessor Forms: Assessment Value Change Review for a change from a “supplement, roll correction, or rehab.” Assessor: 804-646-7500.
ORD. 2024-130 (Legistar full text; Final action 2024-05-28; fetched 2026-11-05): §4 in force July 1, 2026. Assessor assesses as of July 1. Amended § 26-105 uses a May 1 completion cutoff, a July 1 base in the two-part math, and for assessments after March 1 extends nonpayment penalty from June 5 to August 5. The ordinance title says the § 26-105 changes are to be effective for real estate tax assessments used to calculate taxes for tax years beginning January 1, 2028, and later. Its § 3 keeps Section 1 for tax years beginning January 1, 2026, and January 1, 2027.
If the house completes in late 2026, confirm with Assessor and Finance which cutoff and base date apply, and how a supplemental bill is issued while Finance still publishes January 14 / June 14 dues.
Closing allocation versus who the treasurer can bill
Settlement agents prorate known real estate tax bills between seller and buyer per the contract and local custom. On a new build, the seller is often the builder. If the only bill on record is land-only, the closing disclosure can understate the year’s tax on the finished house. See our Virginia closing costs explainer for taxes as a prepaid item; this page owns what can arrive after.
Some contracts reopen the split when a supplemental bill arrives. Many builder agreements are silent. Read the tax section before you sign.
Closing allocation is not statutory tax liability. The collecting official bills per local practice and ownership records. The owner of record when the bill is due often faces the payment demand even if a contract says someone else should reimburse. Who reimburses whom is a contract question, not a statute that automatically puts the bill on the builder.
Lender escrow and shortages
Servicers estimate escrow from a tax figure that may still be land-only. When a supplemental or full completed-value bill posts, escrow can shortfall and the monthly payment can rise at analysis.
Henrico notes regular bills typically go to the mortgage company. A supplemental mail path may differ. Ask the servicer in writing whether it has the bill and will pay it.
Keep 3 money events separate: (1) paying the supplemental bill, (2) curing an escrow shortage, and (3) the next regular assessment at completed value (January 1 in most counties; July 1 on the City Assessor’s published appeal-process language).
Hypothetical example
Every number below is hypothetical. No real parcel, bill, or rate math is quoted.
- Land-only annual tax on the assessment-date books: $900.
- Estimated completed-home annual tax: $4,200.
- Mid-July certificate of occupancy in a § 58.1-3292 locality with a January 1 base and November 1 cutoff.
Closing that prorates from $900 can look tiny beside a finished house. Under the statute, the year’s tax is completed-building tax × the post-completion portion of the year, plus January 1 condition tax × the pre-completion portion. A mid-July date is roughly half and half for illustration only; the assessor’s recorded completion date controls. Budget for a gap between the land-only closing split and a later bill or escrow true-up.
Not the same as a CDA or special district
A partial-year or supplemental reassessment updates the house missing from the assessment-date value. A community development authority or special assessment district adds a separate levy for district projects, sometimes for many years. Chesterfield already lists service districts and the Lower Magnolia Green CDA on its Assessments page. Same county can have both. They are not the same charge. A dedicated CDA explainer is planned.
What to ask before closing
- Settlement agent: Is the proration land-only? Is there a re-proration agreement? Who holds funds if so?
- Builder contract: Who pays tax on improvements for the year of completion?
- Assessor / commissioner: Has this locality adopted § 58.1-3292? When is substantial completion determined? When does a supplemental assessment post?
- Treasurer / collector: How is the supplemental bill mailed, when is it due, and does it go to the servicer?
- Lender / servicer: What tax amount funded escrow? What happens when the completed value hits?
Want a second set of eyes on the tax lines before closing? Call 804-896-2694.
No. Where a locality has adopted Va. Code § 58.1-3292, the bill taxes the finished building for the part of the year after it was substantially complete or fit for use. It covers value that was not on the assessment-date books. Late-payment penalties are separate and follow local due-date rules.
Settlement agents usually prorate from the last real estate tax bill on record. On a new home that bill may reflect land-only value as of the assessment date. The finished house can be assessed later if the locality uses a new-building ordinance, so the closing split can look small beside next year’s full bill.
No. § 58.1-3292 applies only after the locality adopts an ordinance. Hanover and Chesterfield appear to have matching ordinances; confirm with each county. Henrico’s Chapter 20, as fetched for this article, does not show that section. City of Richmond has new-building assessment rules and an active calendar transition. Always ask the local assessor.
The treasurer bills according to local practice and ownership records. Contracts and any re-proration agreement decide who reimburses whom. Without a re-proration clause, the owner of record when the bill is due often pays first and then looks to the contract. Read the builder’s tax section before signing.
Only if the servicer receives the bill and has enough in escrow. Regular bills in some counties often go to the mortgage company, but a supplemental bill may be mailed differently. Ask the servicer in writing. Even if escrow pays, an escrow shortage or higher monthly payment can still follow.
Under the statewide § 58.1-3292 model, the mid-year assessment applies when the building is substantially completed or fit for use and occupancy prior to November 1 of the completion year. City of Richmond’s code is changing with ORD. 2024-130; confirm the cutoff and base date that apply to the completion date on the buyer’s facts.
A partial-year or supplemental reassessment updates the house that was missing from the assessment-date value. A community development authority or special assessment district adds a separate levy for district projects, sometimes for many years. They can both appear in the same county. They are not the same charge.
Localities provide appeal paths. The City of Richmond Assessor lists an Assessment Value Change Review for changes from a supplement, roll correction, or rehab. In other localities, ask the assessor for the deadline that applies to a mid-year value. Appeal rules are separate from the treasurer’s due date.
Usually less. Once the completed value is on the regular assessment roll, the closing proration typically uses that bill. If completion and your purchase fall in the same tax year, ask the same supplemental and re-proration questions before you close.
For the regular-cycle appeal process, see our property tax appeal guide for Richmond.
Closing
Assessment-date value sets the bill everyone can see at closing. A § 58.1-3292 ordinance, where adopted, can add a partial-year bill on the finished house. Escrow and the builder contract decide how that later bill hits your cash, not the closing proration alone.
If you are closing on a Richmond-area new build and the tax proration looks land-only, we can walk the CD, the builder contract, and the locality questions with you before you sign. Book a time at cal.com/danielyoon or call 804-896-2694.
Daniel Yoon, REALTOR®, eXp Realty.
General information for Richmond-area buyers, not tax, legal, or lending advice. Confirm due dates, ordinance status, and billing practice with the local assessor or commissioner of the revenue, the treasurer or collector, your settlement agent, and your lender. Rules and published calendars can change.
More new-construction context: our new construction guide and quality new construction homes by trusted builders. For cash-to-close budgeting, see the buyer cash-to-close calculator.