HENRICO Co., Va. (WWBT) – Henrico County is planning to provide relief to residents as they experience high personal property taxes.
On Friday, county leaders announced a two-part plan to address the frustrations raised by residents about their car tax bills.
“To our residents, thank you, we heard you,” said Henrico County Manager John Vithoulkas.
The non-stop phone calls to county leaders over the last week have not gone unnoticed.
“I was at the hospital yesterday and somebody came up to me to ask me about personal property tax,” said Varina District Supervisor Tyrone Nelson.
Some residents saw more than a 50% increase in their car tax bills this year, only adding to the other challenges of inflation.
“Our constituents are struggling with grocery prices, with gas prices,” said Brookland District Supervisor Dan Schmitt. “For our county to be able to budget well, we budgeted an increase, but the county staff did not budget for this number.”
The hike is a common theme across much of Virginia as car values have risen due to supply and demand.
“Used-car prices are up over 35% nationally. We’re talking $8,000-$9,000 they’re up,” Karl Brauer, the executive analyst with iSeeCars.com, said. “Right there in Richmond area, they’re up 37.4%. That’s like $8,300 compared to just one year ago, and now the average used car in Richmond, Virginia costs over $30,000.”
“Our finance team never projected such a substantial increase in personal property tax revenues from vehicles because the final estimates, the final values actually come in after the budget is adopted,” Vithoulkas said.
According to a news release, the county uses the overall lowest set of values from J.D. Power’s pricing guide for vehicle assessments.
A week after these personal property bills were sent out, county leaders announced a two-part plan to provide relief.
The first part will extend the deadline for the first payment by 60 days – moving it from June 6 to Aug. 5 without penalties or interest.
However, the major change residents will notice is the reduction of the tax rate by 52-cents.
“This will effectively reduce the tax rate on these vehicles to $2.98 for the entire year,” said Henrico Finance Director Sheila Minor.
That means if your vehicle is assessed at a value of $25,000 you would get a tax credit of $130. Those credits will be applied to your second installment which is due in December.
For residents who already paid their bill in full, they will receive a refund check once that credit is applied later this year.
“We’re not in the business of trying to make money, what we’re trying to do is give back,” Nelson said.
This move is possible because of a new law that take effect July 1. House Bill 267 allows localities to return surplus personal property tax revenues to owners of qualifying vehicles, specifically automobiles, trucks and motorcycles.
“We did not budget those values and the revenue that comes from the values, which equals about $20 million, that belongs to our taxpayers,” Vithoulkas said.
This is in addition $20 million in real estate tax relief through the 2+2 plan approved earlier this year. There is also $11 million in tax relief going out to Henrico residents who are 65 years and older through the Real Estate Advantage Program. Overall, $50 million could be returned to residents by the end of 2022.
The plan does require approval by the Board of Supervisors. An ordinance will be introduced on Tuesday to extend the deadline for the first payment. Later this summer, supervisor will also approve the 52-cent reduction. It’s anticipated the board will unanimously approve both measures.
Meanwhile, residents in Chesterfield County also voiced frustrations with the skyrocketing bills due on personal property tax this year.
Chesterfield County released the following statement saying in part:
“We are living through unusual economic conditions. Inflation is up and prices for goods and services are increasing, which had a direct impact on your real estate and vehicle taxes. At least with real estate, you expect the investment in your home, and therefore your real estate taxes to increase. You buy a vehicle, expecting it to depreciate as it gets used, and therefore to decrease in value. Unfortunately, the law requires a different valuation method, which in 2022 resulted in an increase in vehicle tax assessments.”
Read Chesterfield’s full statement here.
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