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Understanding Capital vs Non-Capital Projects

In the Commonwealth of Virginia, a capital project is currently defined as one that creates at least 5,000 gross square feet of building space, or exceeds $3 million in total project cost. Below these thresholds, a project may be treated as a non-capital project or an operating expense.

 In comprehensive terms, a "capital project" refers to:

  1. Acquisition of real property;
  2. New construction projects with a total project cost exceeding $3,000,000 for institutions of higher education;
  3. Improvements, renovations, repairs, replacement, maintenance, or combination projects for a single building with a total project cost exceeding $3,000,000 for institutions of higher education;
  4. Umbrella projects.

Special rules apply to energy performance contracts/ESCOs and capital leases.

  Non-Capital Capital
Total Project Cost <$3M >$3M
Square Footage <5,000 sq ft > 5,000 sq ft