CITY OF CHARLOTTESVILLE, VIRGINIA CITY COUNCIL AGENDA Agenda Date: May 17, 2021 Action Required: Approval of Homeowner Tax Relief Grant Program Presenter: Todd D. Divers, Commissioner of the Revenue Staff Contacts: Todd D. Divers, Commissioner of the Revenue Title: Homeowner Tax Relief Grant – 2021 Background: Attached is an ordinance for Council’s consideration for the Homeowner Tax Relief grant program for low-and moderate-income homeowners for Calendar Year 2021. The program allows the owners of eligible homeowner-occupied properties grant amounts applied to real estate taxes due on the property for the second half of calendar year 2021. Discussion: Enabling language for the CHAP Program is found in Sec. 50.7 of the City’s Charter, which requires that in determining who are “low and moderate income persons” the City must apply the income guidelines issued by the VHDA for use in its single-family mortgage loan program. Those guidelines also contain limitations on the value of the home in question. Current VHDA guidelines stipulate a maximum income threshold of $90,000 and a maximum home value of $375,000. The grant and income parameters for the 2021 CHAP Program are as follows: 2021 CHAP Applicant $0 - $25,000 $25,001 - $35,001 - $45,001 - Income $35,000 $45,000 $55,000 Grant Amount Full Relief $1000 $750 $500 Any remaining grant amount in excess of what is owed on the taxpayer’s second half bill, but not to exceed the entire annual tax due, shall be remitted to the taxpayer. Maximum value for a qualifying home is $375,000. Alignment with City Council’s Vision and Priority Areas: This aligns with the City Council’s Vision “…to be flexible and progressive in anticipating and responding to the needs of our citizens.” Budgetary Impact: Cost of this program is funded with the annual budget appropriation for Fiscal Year 2022 once approved by Council. Recommendation: Approve proposed ordinance AN ORDINANCE TO ESTABLISH A GRANT PROGRAM TO PROMOTE AND PRESERVE HOMEOWNERSHIP BY LOW- AND MODERATE-INCOME PERSONS WITHIN THE CITY OF CHARLOTTESVILLE WHEREAS, effective July 1, 2006, §50.7 of the Charter of the City of Charlottesville authorizes City Council to make grants and loans of funds to low- or moderate-income persons to aid in the purchase of a dwelling within the City; and WHEREAS, this City Council desires to offer a monetary grant for Fiscal Year 2021- 2022, to aid low- and moderate-income citizens with one of the ongoing expenses associated with the purchase of a dwelling, i.e. real estate taxes; and WHEREAS, public funding is available for the proposed grant; NOW, THEREFORE, be it ordained by the Council of the City of Charlottesville, Virginia, effective July 1, 2021 and for calendar year 2021: Grant—provided. (a)There is hereby provided to any natural person, at such person’s election, a grant in aid of payment of the taxes owed for the taxable year on real property in the city which is owned, in whole or in part, and is occupied by such person as their sole dwelling. The grant provided within this section shall be subject to the restrictions, limitations and conditions prescribed herein following. (b)If, after audit and investigation, the Commissioner of Revenue determines that an applicant is eligible for a grant, the Commissioner of Revenue shall so certify to the City Treasurer, who shall implement the grant as a prepayment on the applicant’s real estate tax bill due on December 6, 2021. (c)The amount of each grant made pursuant to this ordinance shall be equal to the total 2021 real estate taxes owed by taxpayers with a household income less than or equal to $25,000; $1,000 for taxpayers with a household income of $25,001-$35,000; $750 for taxpayers with a household income of $35,001-$45,000; and $500 for taxpayers with a household income from $45,001- $55,000, to be applied against the amount of the real estate tax bill due on December 6, 2021. Any remaining grant amount in excess of what is owed on the taxpayer’s second half bill, but not to exceed the entire annual tax due, shall be remitted to the taxpayer. Definitions. The following words and phrases shall, for the purposes of this division, have the following respective meanings, except where the context clearly indicates a different meaning: (1)Applicant means any natural person who applies for a grant authorized by this ordinance. (2)Dwelling means a residential building, or portion such building, which is owned, at least in part, by an applicant, which is the sole residence of the applicant and which is a part of the real estate for which a grant is sought pursuant to this ordinance. (3)Grant means a monetary grant in aid of payment of taxes owed for the taxable year, as provided by this ordinance. (4)Spouse means the husband or wife of any applicant who resides in the applicant’s dwelling. (5)Real estate means a city tax map parcel containing a dwelling that is the subject of a grant application made pursuant to this ordinance. (6)Taxes owed for the current tax year refers to the amount of real estate taxes levied on the dwelling for the taxable year. (7)Taxable year means the calendar year beginning January 1, 2021. (8)Household income means (i) the adjusted gross income, as shown on the federal income tax return as of December 31 of the calendar year immediately preceding the taxable year, or (ii) for applicants for whom no federal tax return is required to be filed, the income for the calendar year immediately preceding the taxable year: of the applicant, of the applicant’s spouse, and of any other person who is an owner of and resides in the applicant’s dwelling. The Commissioner of Revenue shall establish the household income of persons for whom no federal tax return is required through documentation satisfactory for audit purposes. Eligibility and restrictions, generally. A grant awarded pursuant to this ordinance shall be subject to the following restrictions and conditions: (1)The household income of the applicant shall not exceed $55,000. (2)The assessed value of the real estate owned by the applicant shall not exceed $375,000. (3)The applicant shall own an interest in the real estate that is the subject of the application (either personally or by virtue of the applicant’s status as a beneficiary or trustee of a trust of which the real estate is an asset) and the applicant shall not own an interest in any other real estate (either personally or by virtue of the applicant’s status as a beneficiary or trustee of a trust of which the real estate is an asset). (4)As of January 1 of the taxable year and on the date a grant application is submitted, the applicant must occupy the real estate for which the grant is sought as his or her sole residence and must intend to occupy the real estate throughout the remainder of the taxable year. An applicant who is residing in a hospital, nursing home, convalescent home or other facility for physical or mental care shall be deemed to meet this condition so long as the real estate is not being used by or leased to another for consideration. (5)An applicant for a grant provided under this ordinance shall not participate in the real estate tax exemption or deferral program provided under Chapter 30, Article IV of the Charlottesville City Code (Real Estate Tax Relief for the Elderly and Disabled Persons) for the taxable year, and no grant shall be applied to real estate taxes on property subject to such program. (6)An applicant for a grant provided under this division who is delinquent on any portion of the real estate taxes due on a property to which the grant is to be applied, must be in good standing on a payment plan with the Treasurer’s office with the aim of paying off said delinquency. (7)Only one grant shall be made per household. Procedure for application. (a)Between July 1 and September 1 of the taxable year, an applicant for a grant under this ordinance shall file with the Commissioner of Revenue, in such manner as the Commissioner shall prescribe and on forms to be supplied by the city, the following information: (1)the name of the applicant, the name of the applicant’s spouse, and the name of any other person who is an owner of and resides in the dwelling. (2)the address of the real estate for which the grant is sought; (3)the household income; (4)such additional information as the Commissioner of Revenue reasonably determines to be necessary to determine eligibility for a grant pursuant to this ordinance. (b)Changes in household income, ownership of property or other eligibility factors occurring after September 1, but before the end of the taxable year, shall not affect a grant once certified by the Commissioner of the Revenue, in which case such certified grant shall be applied to the subject real estate. (c)Any person who willfully makes any false statement in applying for a grant under this division shall be guilty of a Class 3 misdemeanor and, upon conviction thereof, shall be fined not less than $25 nor more than $500 for each offense.