A. All leasehold interests in real property that is exempt from assessment for taxation
from the owner shall be assessed for local taxation to the lessee. If the remaining term of the lease is 50 years or more, or the lease permits the
lessee to acquire the real property for a nominal sum at the completion of the term,
such leasehold interest shall be assessed as if the lessee were the owner. Otherwise, such assessment shall be reduced two percent for each year that the remainder
of such term is less than 50 years; however, no such assessment shall be reduced
more than 85 percent. If the lessee has a right to renew without the consent of the lessor, the term of
such lease shall be the sum of the original lease term plus all such renewal terms.
B. When any real property is exempt from taxation under Section 6 (a)(1) or (2) or
by designation under Section 6 (a)(6) of Article X of the Constitution of Virginia, the leasehold interest in such property may also be exempt from taxation, provided
that the property is leased to a lessee that is exempt from taxation pursuant to § 501(c) of the Internal Revenue Code or to a lessee that is entitled to or has received federal rehabilitation tax credits
relating to the property pursuant to 26 U.S.C. § 47 or any successor thereto, and is used exclusively by such lessee primarily for charitable,
literary, scientific, cultural, or educational purposes. No leasehold interest or concession, as defined in § 33.2-1800, of tax exempt property of a governmental agency shall be subject to assessment for
local property tax purposes where the property is leased to a public service corporation
or subsidiary thereof or a nonstock, nonprofit corporation whose occupation, use,
or operation of the tax exempt property is in aid of or promotes the governmental
purposes set out in Chapter 10 (§ 62.1-128 et seq.) of Title 62.1 or to a private entity that is party to a concession agreement with
a responsible public entity pursuant to the Public-Private Transportation Act of 1995
(§ 33.2-1800 et seq.) or to similar federal law.
C. When any real property is exempt from taxation under § 15.2-7510, the leasehold interest in the property shall also be exempt from taxation.
D. The provisions of this section shall not apply to any leasehold interests exempted
or partially exempted by other provisions of law.
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