State and Local Government Clinic Andrew Block, Director MEMORANDUM TO: Lisa Robertson, Charlottesville City Attorney Lloyd Snook, Mayor of Charlottesville FROM: Scott Chamberlain, UVA Law Maggie Woodward, UVA Law RE: Property Tax Exemption Expansion DATE: April 12, 2022 I. INTRODUCTION The City of Charlottesville is interested in providing targeted property tax relief to help those most impacted by tax hikes, particularly low- and moderate-income (LMI) individuals. This Memo begins with an overview of the legal authority that Charlottesville has, restrictions on its authority, its current property tax relief programs, and recommendations for expanding relief. We first discuss existing programs and statewide tax credits available to some home owners in order to survey all of Charlottesville’s existing options before recommending alternatives. II. LEGAL AUTHORITY AND RESTRICTIONS The authority for taxation in Virginia stems from the state constitution. The Virginia Code further elaborates on the programs authorized and restricted by the constitution, and local charters have the ability to further restrict or enable the powers of a city within the constitutional bounds. It is important to keep in mind that Virginia is a Dillion rule state: localities may only exercise “1) powers expressly granted by the state, (2) powers necessarily and fairly implied from the grant of power, and (3) powers crucial to the existence of local government.”1 Therefore, the very limited exemptions allowed by the Virginia Constitution create a strong top-down control on the relief that localities may provide. This 1 https://nebraskalegislature.gov/pdf/reports/research/snapshot_localgov_2020.pdf 580 Massie Road, Charlottesville, VA 22903-1738 | P 434.243.4320 | F 434.924.7315 | E ablock@law.virginia.edu www.law.virginia.edu section outlines the flow of authority for the taxation of property from the Virginia Constitution to Charlottesville, and includes a discussion of the limits established by the constitution, the provisions of the Virginia Code set further boundaries for localities, and Charlottesville’s special powers under its City charter. A. VIRGINIA CONSTITUTIONAL LIMITS ON PROPERTY TAX EXEMPTIONS Article X of the Virginia Constitution provides strong, top-down control on taxation in the Commonwealth. For local property taxes, all rates are required to be “uniform upon the same class of subjects,” meaning that property cannot be taxed at differential rates within a locality.2 The Constitution permits the General Assembly is to pass laws allowing localities to tax the personal property of people who are disabled or elderly3 at different rates when they are deemed to bear an extraordinary tax burden, but that exception does not extend to property tax.4 Article X, § 6 of the Virginia Constitution outlines numerous specific property tax exemptions. Many of those exemptions are not at issue here, but they include property owned by the Commonwealth, property owned and used exclusively by religious bodies, and cemeteries.5 By the constitution’s own terms, any exemptions are to be strictly construed.6 Further, the General Assembly may restrict or condition, in whole or in part, but not extend” the Constitutional exemptions.7 Under Article 6, Section 6, the General Assembly can authorize localities to exempt property owned by elderly and disabled persons from taxation.8 However, the constitution does not specify any authority to exempt property from taxation based on the income or assets of the property owner.9 Additional property tax exemptions are laid out in Section 6-A and 6-B of Article X. These exemptions include property which is the primary residence of the surviving spouse of a member of the Armed Forces who was killed in action,10 real property, including the joint real property of husband and wife, of any veteran who has been rated by the U. S. Department of Veterans Affairs to have a 100 percent service connected, permanent, and total disability, and who occupies the real property as his principal place of residence, and property of a surviving spouse of an emergency services worker who was killed in the line of duty.11 Though these exemptions do not relate to property tax relief for LMI households, they are helpful to keep in mind when surveying the practices of other localities. 2 Va. Const. art X, § 1. There is an exception to this rule for land that has been added to the locality, though that is not at issue here. 3 Specifically, the constitution allows people sixty-five years of age or older to receive exemptions. Across localities, this group is commonly referred to as “elderly,” and so this memo will use that term throughout. 4 Va. Const. art X, § 1. 5 Va. Const. art X, § 6(a) (1)-(3). 6 Va. Const. art X, § 6 (f) 7 Va. Const. art X, § 6 (c) 8 Va. Const. art X, § 6 (b). 9 Id. Professor Dick Howard explained that when the constitution was written, the drafters retained language about tight General Assembly control over exemptions in order to prevent localities from undermining their budgets with a flood of exemptions. 10 Va. Const. art X, § 6-A(b) 11 Va. Const. art X, § 6-B. 2 B. VIRGINIA CODE PROVISIONS RELATED TO PROPERTY TAX EXEMPTIONS The Virginia Code provides further guidance to localities on the constitutionally permitted exemptions and also creates authority for property tax deferrals in certain circumstances.12 The Code adds conditions to the exemptions available to elderly and handicapped people, including requiring the dwelling to be occupied as the sole residence of the qualifying taxpayer and allowing for localities to choose to provide partial exemptions.13 Prior to 2011, locality programs were subject to maximum income and net worth limitations set by the state.14 Those limitations were repealed in 2011; presently, localities have discretion to set net worth and income conditions on their exemption program by ordinance.15 Localities are also permitted to grant deferrals, though not exemptions, to groups beyond the elderly and handicapped.16 A deferral created under this provision gives property owners the option to defer “all or any portion of the real estate tax that exceeds 105 percent of the real estate tax on such property owned by the taxpayer in the previous tax year. Localities may choose to set a higher threshold, e.g. 110 percent. C. PROPERTY TAXATION AUTHORITY IN THE CHARLOTTESVILLE CITY CHARTER Charlottesville’s City Charter, which has been approved by the General Assembly, gives the City special powers related to housing and community development that can be used to offset the burdens of housing costs. Specifically, the Charter gives Charlottesville three powers: (1) the ability to award grants to LMI households to aid in purchasing land or a dwelling, (2) the ability to offer property tax deferrals to LMI households, and (3) the ability to award grants to LMI households to subsidize rental payments.17 The Charter limits Charlottesville’s discretion in establishing the thresholds for qualifying as a LMI household. Persons or families of low- or moderate-income are defined under the Virginia Housing Development Authority Act,18 and that definition is incorporated by reference into the City Charter. The 12 An exemption is an amount deducted from the real estate tax owed in a given year and never required to be repaid. In contrast, a tax deferral is due (1) when the property is sold or (2) when the person qualifying for the deferral dies. Deferred amounts can accrue interest r from the time the deferral starts until it is paid. 13 Va. Code § 58.1-3210. 14 Va. Code § 58.1-3211 (repealed 2011). The income cap was set to $50,000 and the net worth cap was set to $200,000 in most areas, though Charlottesville was given permission to raise their caps through ordinance to “the greater of $67,000 or the income limits based upon family size for the respective metropolitan statistical area, annually published by the Department of Housing and Urban Development for qualifying for federal housing assistance.” 15 Va. Code § 58.1-3212. 16 Va. Code § 58.1-3291. 17 Charlottesville City Charter § 50.7. Note that grants to offset rent burdens are a separate issue from property tax relief. However, the powers are enumerated together and Charlottesville’s housing programs, discussed infra, make use of this power, so we note it here. In addition, these grants may help a renter remain in their home if their landlord raises rents in response to rising property tax rates and property assessments. 18 "Persons and families of low and moderate income" means persons and families, irrespective of race, creed, national origin, sex, sexual orientation, or gender identity, determined by the HDA to require such assistance as is made available by this chapter on account of insufficient personal or family income taking into consideration, without limitation, such factors as follows: (i) the amount of the total income of such persons and families available for housing needs, (ii) the size of the family, (iii) the cost and condition of housing facilities available, (iv) the ability of such persons and families to compete successfully in the normal private housing market and to pay the amounts at which private enterprise is providing sanitary, decent and safe housing, and (v) if appropriate, standards established for various federal programs determining eligibility based on income of such persons and families. Va. Code § 36-55.26. 3 Charter also requires Charlottesville to use the Virginia Housing Development Authority’s (VHDA) single-family mortgage loan program income guidelines to determine if a household qualifies as LMI for the programs enabled in the Charter. VHDA’s loan program provides affordable mortgages for first-time homebuyers.19 Borrowers qualify for VHDA’s program if their income and the value of their loan (or value of the home being purchased) fall below a certain threshold. Income and loan limits vary based on the number of people in the household (2 or fewer versus 3 or more) and the location of the home. For Charlottesville, the income limit for a 1-2 person household is $90,000, and the limit for a household of 3 or more people is $105,000.20 These income guidelines are binding for the VHDA mortgage program, and the Charter states that the city “shall” apply these guidelines to determine which households qualify as LMI. Though the VHDA mortgage program also has limits on the size of the loan available to a borrower, only the income limitation is specified as a criteria in the Charlottesville City Charter. D. OTHER SOURCES OF AUTHORITY THAT CHARLOTTESVILLE COULD USE FOR RELIEF In addition to the City’s powers to grant tax exemptions and deferrals, we explored two other domains of local authority that Charlottesville could draw upon to grant residents property tax relief: social services and housing and community development. This section summarizes our findings. 1. SOCIAL SERVICES The role of local social services boards is geared toward providing assistance in the traditional domains of social services.21 However, Virginia Code § 63.2-314 allows a locality to make grants to its local board of social services, which in turn can make grants “for the purpose of aiding needy people” in the locality.22 The local board has discretion to set program participation requirements, and is not restricted by the criteria the state uses for its public assistance programs. Therefore, this provision gives Charlottesville broad latitude to establish grant programs that can aid residents who are having difficulty meeting their property tax burden, provided the programs are administered by the local board of social services.23 19 Virginia Housing, Home Loan Options (booklet available through https://www.virginiahousing.com/homebuyers/home- loans) 20 Virginia Housing, Income And Sales Price / Loan Limits, https://www.virginiahousing.com/loanlimits . The income limitations for VHDA mortgages are set by the agency’s executive director, taking into account considerations specified in 13 VAC 10-40-100, with the goal of efficiently and effectively allocating VDHA’s resources. Considerations include VDHA’s anticipated resources, anticipated demand for mortgages, and prevailing mortgage terms available to potential applicants. The executive director is required to inform originating lenders of the income guidelines “from time to time,” and has discretion to implement changes to the guidelines “on such date as he shall deem necessary or appropriate to best accomplish the purposes of the program.” 21 Social services, in turn, are defined as: “foster care, adoption, adoption assistance, child-protective services, domestic violence services, or any other services program implemented in accordance with regulations adopted by the Board. Social services also include [certain] adult services… and adult protective services.” Va. Code § 63.2-100. 22 Va. Code § 63.2-314; see also 1973 Va. Atty. Gen. Op. 417. 23 Charlottesville has designated the City’s director of social services as the local board of social services, as permitted by Virginia Code § 63.2-304. Charlottesville City Code § 25-28. It is the local board (consisting of one person), and not the City’s advisory board for social services, that has the authority to administer programs under § 63.2-304. 4 2. HOUSING AND COMMUNITY DEVELOPMENT The Board of Housing and Community Development, a state policy board, promulgates regulations related to housing, community development, building safety, and fire prevention.24 BHCD regulations are contained in Title 13, Agency 5 of the VA Administrative Code. Most of their regulations govern housing safety and building codes, but some relate to tax credits and affordability, outlined below.25 None of the tax credits are applied directly to property taxes. 1. Virginia Housing Opportunity Credit: A tax credit for homeowners providing low-income housing. Your building must have been put into service in Virginia on or after January 1, 2021, and it must meet the definition of low-income housing provided in §42(c) of the Internal Revenue Code.26 You get: A tax credit equal to the amount of the federal low-income housing tax credit Virginia Housing allows for the project. Virginia Housing can issue no more than $15 million in Housing Opportunity Credits per year. You can use this credit against: Individual income tax, Fiduciary income tax, Corporation income tax, Bank franchise tax, Insurance premiums license tax. 2. Livable Home Tax Credit: A tax credit for Virginians who purchase or build a new accessible residence; or retrofit an existing residence with accessibility features. Amount: $5,000 for the purchase of a new accessible residence; or 50% of the cost of retrofitting an existing residence, not to exceed $5,000.27 3. Communities of Opportunity Tax Credit: Landlords with units participating in the Housing Choice Voucher program are eligible for a tax credit. However, under state code, the housing must be in: the Richmond Metropolitan Statistical Area, (ii) the Washington-Arlington-Alexandria Metropolitan Statistical Area, or (iii) the Virginia Beach-Norfolk-Newport News Metropolitan Statistical Area.28 Charlottesville could potentially access this credit if the GA altered the state code, which is expanded on in Section IV, Proposals for Action. 4. There are additional tax credit programs that would likely not be relevant to this project. The Enterprise Zone Act Credit applies to business grants signed before 2005. The Historic Rehabilitation credit covers a portion of rehabilitation costs if one is restoring a historic home. Lastly, the Neighborhood Assistance Credit applies to individuals who donate items, funds, or services to approved nonprofits.29 24 https://www.virginia.gov/agencies/department-of-housing-and-community-development/#vagov-about 25 https://law.lis.virginia.gov/admincode/title13/agency5/ 26https://www.tax.virginia.gov/housing-and-community-development-tax-credits#virginia-housing-opportunity-credit 27 Id. 28 Virginia Code 58.1-438 29https://www.tax.virginia.gov/housing-and-community-development-tax-credits#virginia-housing-opportunity-credit 5 III. CURRENT CHARLOTTESVILLE PROGRAMS Pursuant to this authority, Charlottesville has created a number of tax relief and deferral programs for homeowners and renters in the city. The Commission of the Revenue administers these programs, which are summarized below. 1. Real Estate Tax Relief (RETR): Real estate tax exemptions for elderly and disabled homeowners under authority derived from Va Code 58.1-3210 and established in Charlottesville City Code Article IV.30 In order to qualify, (1) the head of household occupying the dwelling and owning title, must be sixty-five years or older or permanently disabled on December 31 of the year immediately preceding the taxable year.31 (2) Gross combined income (from all sources living in the dwelling) has a cap of $50,000 (first $7,500 of income for disabled resident is exempt, first $8,500 from other non-spousal residents is exempt)32 [Note: the table of values goes to $55k33, but the code says $50k].34 (3) Inhabitants must have a net combined financial worth of $125,000 (excluding dwelling). The resident receives the exemption when the City Treasurer deducts the amount of the exemption from the applicant’s tax bill.35 In 2021, the City spent $582,153 on the program.36 2. Charlottesville Housing Affordability Program (CHAP): A program intended to provide assistance to homeowners who may not otherwise qualify for the City’s elderly and disabled tax relief programs.37 CHAP provides grants to low- and moderate-income households to “offset the financial hardships faced by many homeowners due to rising real estate assessments.” Depending upon the participant’s Federal Adjusted Gross Income, the grant may be $500, $750, $1,000, or a full property tax abatement with an income cap of $55,000 per household. 3. Rental Relief for the Elderly and Disabled: Grants to low-and-moderate-income people who are elderly or disabled to subsidize rent payments, if the tenants are deemed to bear an extraordinary burden.38 In order to qualify, a tenant's gross combined income (from all sources living in the dwelling) must be less than $50,000 (first $7,500 of income for disabled residents is exempt, first $8,500 from other non-spousal residents is exempt) and net combined financial 30 Charlottesville City Code, Article IV 31 Id. 32 Id 33 Charlottesville City Code, Sec. 30-101 34 Id. (The $50,000 income cap in the code may be out of date, and we recommend updating it to $55,000) 35 From a Zoom interview with Todd Divers 36https://www.charlottesville.gov/DocumentCenter/View/7485/FY-2022-23-City-Managers-Proposed-Budget-PDF?bidId=, Page G-6 37 https://www.charlottesville.gov/DocumentCenter/View/203/Charlottesville-Housing-Affordability- Program-Application-PDF 38 Charlottesville City Code, 25-58 - 25-61 6 worth must not exceed $125,000.39 The City Treasurer pays grants to applicants. Amounts paid are: the lesser of $1500 or 25% of the amount determined by subtracting 24% of gross combined income from the lesser of: the actual amount of rent paid; or $12,000.40 IV. PROPOSALS FOR ACTION Based on the current authorities and limitations that Charlottesville is subject to with regard to providing relief from property taxes to homeowners, we have divided our recommendations into three groups: short-term recommendations (that can be carried out by the City within its current authority), medium-term recommendations (that require a change to the Virginia Code), and long-term recommendations (that require a change to the Virginia Constitution. A. SHORT TERM RECOMMENDATIONS 1. CHANGE THE CRITERIA FOR CHARLOTTESVILLE’S CURRENT PROGRAMS (a) Raise income limits. The income caps on Charlottesville’s current programs are lower than they could be. Though authority for the programs stems from different statutes, each statute allows the City or its agencies room to alter the program eligibility criteria. The City could choose to harmonize the income limits across programs, or tailor each program to the needs of the target population. RETR: The income cap on the RETR program is likely a legacy issue from when the program was subject to limitations set at the state level, discussed above. Under Va. Code § 58.1-3212, a locality has discretion to establish limitations, like an income cap, on the program. CHAP: The provision that provides authority for CHAP, § 63.2-314, explicitly states that local boards of social services can use more expansive criteria than the eligibility requirements for the state’s public assistance programs. Therefore, Charlottesville’s local board is not limited in the discretion it has to set, change, or eliminate limitations on income and net worth for program applicants. Rent Relief: To the extent that Charlottesville’s Rent Relief program is conducted under the City’s powers granted in § 50.7 of the City Charter, Charlottesville must apply the VHDA’s mortgage program income guidelines to determine what households qualify as LMI. Charlottesville’s programs have caps well below the VHDA’s income guidelines for the area, so there is room for the City to raise the income caps. Alternatively, if the City operated the Rent Relief program under § 63.2-314 with the required administration by the board of social services, then the board would not be subject to the VHDA guidelines and would instead have discretion to set, change, or eliminate limitations on income and net worth for program applicants. 39 Id 40 Charlottesville City Code, 25-61 7 Appendix 1 contains a table summarizing the program requirements and amounts of relief provided by Virginia localities through programs comparable to RETR and Rent Relief. Program Income Cap Real Estate Tax Relief (RETR) $50,000 per household Rental Relief $50,000 per household Charlottesville Housing Affordability Program (CHAP) $55,000 per household VDHA’s income cap for Charlottesville $90,000 (1-2 person household) $105,000 (3+ person household) (b) Amend or Remove CHAP’s home value limitation. Charlottesville currently limits participation in the CHAP program to homeowners whose home has an assessed value of $375,000 or less.41 This asset valuation cap was likely adopted to mirror the loan limits of the VHDA mortgage program. However, we have found no statutory basis for applying an asset limitation to the CHAP program. The provision that appears to authorize CHAP, § 63.2-314, explicitly states that local boards of social services can use more expansive criteria than the eligibility requirements for the state’s public assistance programs. Therefore, Charlottesville could consider raising or removing the limitation to expand eligible program participants. (c) Expand Rental Relief. Rental relief does not directly affect a homeowners property tax burden. However, we postulate that if a landlord increased rents in response to increasing assessments and tax rates, Rental Relief could help absorb the cost of the rent increase, allowing a tenant to remain in the home when they might not otherwise be able to. Charlottesville limits its Rental Relief program to elderly and disabled residents.42 However, the City Charter gives Charlottesville the power to award grants to reduce rent burdens to LMI households, as well, subject to the VHDA income limitations.43 Charlottesville could consider expanding Rental Relief to include LMI households. 41 Charlottesville, Real Estate Tax Relief: Charlottesville Housing Affordability Program (CHAP), https://www.charlottesville.gov/1513/Real-Estate-Tax-Relief (last accessed Apr. 1, 2022). 42 City Code of Charlottesville Sec. 25-58(2). 43 Charlottesville City Charter Sec. 50.7. 8 2. ELIMINATE THE NET WORTH REQUIREMENT ON THE RETR PROGRAM Charlottesville’s Commissioner of the Revenue has already proposed removing the net worth limitation on RETR, which restricts the program to households with a net worth of $125,000 or less, excluding the value of the dwelling itself. Like the income cap on RETR, this net worth cap may be a legacy of the state statute that placed more limitations on locality exemptions prior to 2011.44 Presently, localities have discretion to set net worth limitations for their property tax exemption programs for elderly and disabled individuals,45 meaning that the RETR net worth cap could be raised or eliminated. Eliminating the net worth cap could expand the reach of the program while also making the program easier to administer. The Commissioner of the Revenue reports that reviewing documentation to validate the net worth limitation is time consuming for the Commissioner's staff.46 In addition, the Commissioner noted that residents are often confused about what documentation is needed for their application. Lastly, maintaining a net worth limitation on the RETR program, when a similar limitation is not placed on the City’s CHAP program raises issues of fairness. 3. AMEND THE CHARLOTTESVILLE ORDINANCE ESTABLISHING RETR Currently, the text of the ordinance outlining the RETR program lists the maximum income for program participants as $50,000 per year.47 However, tables showing the benefit for the program display a maximum income of $55,000, as does guidance from the City.48 To avoid confusion and ensure that the program is administered in compliance with City law, we recommend amending the ordinance so that the income cap is consistent throughout. Text of City Code of Charlottesville Sec. 30-98, showing income limit of $50,000 for RETR. 44 Va. Code § 58.1-3211 (repealed 2011). 45 Va. Code § 58.1-3212. 46 Interview with Todd Divers. 47 City Code of Charlottesville Sec. 30-98(5). 48 See, e.g., Charlottesville, Real Estate Tax Relief for the Elderly and Disabled, https://www.charlottesville.gov/DocumentCenter/View/226/Real-Estate-Tax-Relief-for-the-Elderly-and-Disabled- Qualifications-PDF. 9 Text of City Code of Charlottesville Sec. 30-101, showing income limit of $55,000 for RETR. 4. CONSIDER A PROPERTY TAX DEFERRAL PROGRAM Property taxes increase when the assessed value of a property increases, or when tax rates are increased. For households with a fixed or limited income, this can make a tax burden unaffordable, even if they were able to pay taxes in the past. In the short run, it is hard for the homeowner to pay property tax. However, they own an asset that is gaining value, and although they cannot access that value at present, when the time comes to sell the home, the homeowner (or their estate) will have increased liquidity than can cover deferred tax amounts.49 Charlottesville has several sources of authority to draw on in offering property tax deferrals. The City may offer deferrals instead of, or in addition, to property tax exemptions elderly and disabled homeowners,50 and can offer deferrals to any homeowner of taxes in excess of 105 percent of the homeowner’s prior year tax burden. In addition, the City Charter gives Charlottesville special permissions to grant property tax deferrals to LMI households, without a restriction on the portion of tax that can be deferred.51 Charlottesville could establish a tax deferral program under one or more of these authorities to reach homeowners not currently served by existing programs. Deferrals do have some drawbacks. A deferral acts as a lien on the property, which some homeowners may wish to avoid. Localities rarely use the deferral authority, mainly due to concerns about administrability.52 According to the Weldon Cooper Center, as of 2018, the cities of Alexandria, Falls Church, and Fairfax and the counties of Fairfax and Henrico had considered, but not adopted, deferral programs. Loudoun County had a deferral program in the 1990s but canceled it because the effort to collect deferred taxes exceeded the benefit to homeowners. Charlottesville’s Commissioner of 49 Va. Code 58.1-3210. 50 Va. Code 58.1-3291. 51 Charlottesville City Charter Sec. 50.7(a). 52 https://ceps.coopercenter.org/sites/ceps/files/2018_VALocalTaxRatesBook.pdf page 8 10 the Revenue has echoed these administrability concerns,53 possibly making it necessary to add staff to the Commissioner of the Revenue’s Office to support the establishment of a deferral program. Finally, the deferral authority in Va. Code 58.1-3291 in particular is limited–it defers only the amount of tax due that exceeds the prior year’s burden by more than 5 percent, offering only temporary relief to a homeowner. Still, this could ease the burden for a homeowner experiencing an unexpectedly large increase in their real estate tax liability (perhaps due to the combination of a simultaneous rate increase and assessed value increase). 5. CONDUCT MORE OUTREACH ON OPPORTUNITIES AVAILABLE TO CHARLOTTESVILLE PROPERTY OWNERS There are several programs at the state level that could have incremental benefits for homeowners, renters, or landlords of low-income housing. For example, Virginia created a new program in 2021–the Housing Opportunity Credit–that provides a state income tax credit to owners of buildings that become low-income housing on or after January 1, 2021.54 Charlottesville could create a central information repository that catalogs all available programs and how they may interact with one another. The vibrant community of affordable housing champions in the City should be consulted to ensure the information is accessible and understandable. B. MEDIUM TERM RECOMMENDATIONS 1 INCLUDE CHARLOTTESVILLE IN THE LOCALITIES COVERED BY THE COMMUNITIES OF OPPORTUNITY TAX CREDIT The Virginia State Code includes a provision allowing landlords in the Housing Choice Voucher Program to apply for a tax credit, but only in particular localities.55 Charlottesville does participate in the Housing Choice Voucher Program,56 but is not included in the list of localities in the state code. Charlottesville could work with the General Assembly to add Charlottesville to the list. The advantage of this change is that it would not require the City to alter their current voucher program in order for landlords to be eligible to apply for the credit. 53 Interview with Todd Divers. 54 Va. Code § 58.1-439.29 et seq. 55 VA Code § 58.1-439 56 https://www.cvillerha.com/section-8-hcv-program/ 11 C. LONG TERM RECOMMENDATIONS 1. AMEND THE STATE CONSTITUTION The state constitution allows property tax exemptions for the elderly and disabled, but no one else, and disallows the General Assembly from expanding this list.57 From talking with Dick Howard, one of the drafters of the modified constitution, the purpose of including the restriction in the constitution was to protect cities from a flood of exemption requests potentially undermining their budgets. When they wrote the constitution, the drafters attempted to find a way to do without the list of exemptions, but it got too complicated and they “threw up their hands.” It may be worth revisiting now to allow localities control over their property tax exemptions. V. CONCLUSION While the City of Charlottesville is restricted in part by the state constitution’s parameters and Virginia’s status as a Dillon Rule state, it still can expand its current slate of property tax exemptions; both in the immediate future and in the long term. First, the City can alter the eligibility requirements and income caps for RETR, CHAP, and Rent Relief based on each program’s authorizing statute. In all three cases, there are either no caps on the parameters a locality can set, or Charlottesville has not reached the caps set by the authorizing statute. Second, the City could work with the General Assembly to modify the state code to include Charlottesville in the list of cities covered by the Communities of Opportunity Tax Credit. Lastly, the City could work to amend the state constitution to expand the list of allowable exemptions, or to remove the restrictions on exemptions altogether. 57 Virginia Constitution, Article X, Sec. 6 12 APPENDIX I The following pages contain Table 3.1: Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 and Table 3.2: Real Property Renter Tax Relief Plans for the Elderly and Disabled, 2018 from the Weldon Cooper Center’s annual report on Local Tax Rates in Virginia. The Tables are from the 2018 report, which is the most recent version that is free to the public. The tables provide a comprehensive snapshot of the limits that localities put on their tax relief programs for elderly and disabled residents. 13 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Cities (Note: All cities responded to the survey. Those that answered “not applicable” for all items in this table are excluded.) Alexandria $72,000 (deferral); $430,000 Income Exemption $72,000 (exemption) excludes 2 acres $0 - 40,000 100% 40,001 - 55,000 50% 50,001 - 72,000 25% Remaining balance may be deferred at 5% interest. Bristol $24,000 $40,000 Flat $200 relief to all qualified householders. excludes 1 acre Buena Vista $25,000; $65,000 Income Exemption no exemptions excludes 5 acres $0 - 6,000 80% 6,001 - 12,000 60% 12,001 - 18,000 40% 18,001 - 25,000 20% Charlottesville $50,000 $125,000 Net Worth excludes 10 acres $0- 25,001- 50,001- 75,001- 100,001- Income 25,000 50,000 75,000 100,000 125,000 $0 - 12,500 100% 80% 60% 40% 20% 12,501 - 25,000 80% 64% 48% 32% 16% 25,001 - 37,500 60% 48% 36% 24% 12% 37,501 - 50,000 40% 32% 24% 16% 8% Chesapeake $62,000 income; $350,000 Income Exemption Income Exemption $10,000 for excludes 3 acres $0 - 22,000 100% $28,001 - 29,500 50% non-spousal relative 22,001 - 23,500 90% 29,501 - 31,000 40% or disabled 23,501 - 25,000 80% 31,001 - 33,500 30% is excluded 25,001 - 26,500 70% 33,501 - 36,500 20% 26,501 - 28,000 60% 36,501 - 44,000 10% 44,001 - 62,000 are eligible for a frozen assessment Colonial Heights $40,000 $80,000 Income Exemption Income Exemption excludes 1 acre $0 - 22,800 100% $30,001 - 31,800 50% 22,801 - 24,600 90% 31,801 - 33,600 40% 24,601 - 26,400 80% 33,601 - 35,400 30% 26,401 - 28,200 70% 35,401 - 37,200 20% 28,201 - 30,000 60% 37,201 - 40,000 10% Maximum exemption $1,600. Covington $35,000 $80,000 50% exemption (maximum: $150) excludes 1 acre Danville $20,000 $50,000 Income Exemption $27,500 if disabled excludes 1 acre $0 - 10,000 100% 10,001 - 15,000 50% or 100% deferral plus 5% interest 15,001 - 20,000 100% deferral plus 5% interest Maximum annual exemption and/or deferral on any one property is $700. Fairfax $72,000 $340,000 Income Exemption excludes 1 acre $0 - 42,000 100% 42,001 - 52,000 50% 52,001 - 72,000 25% Tax deferral up to 100% Tax freeze available based on income table. Falls Church $75,050 $540,000 excludes 1 acre Size of Family Household 1 member 2 members 3 members 4 members Relief Amount $0 - 23,200 $0 - 26,500 $0 - 29,800 $0 - 33,100 $4,000 23,201 - 38,650 26,501 - 44,150 29,801 - 49,650 33,101 – 55,150 $3,000 38,651 - 52,550 44,151 - 60,050 49,651 - 67,550 55,151 – 75,050 $1,000 Real Property Tax Relief Plans 35 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Cities (continued) Franklin $30,000 $60,000 Income Exemption Income Exemption excludes 1 acre $0 - 12,000 100% $16,001 - 17,000 50% 12,001 - 13,000 90% 17,001 - 18,000 40% 13,001 - 14,000 80% 18,001 - 19,000 30% 14,001 - 15,000 70% 19,001 - 20,000 20% 15,001 - 16,000 60% 20,001 - 30,000 10% Fredericksburg $50,000 $200,000 Income Exemption excludes 1 acre $0 - 30,000 100% 30,001 - 40,000 80% 40,001 - 50,000 60% (Maximum: $1,500) Any taxes over exempt amount may be deferred. Galax $23,000 $75,000 All income up to $23,000 qualifies for $200 relief excludes 1 acre Hampton $50,000 $200,000 Income Exemption excludes 10 acres $0 - 25,000 100% 25,001 - 27,000 75% 27,001 - 29,000 50% 29,001 - 31,000 25% 31,001 - 50,000 may freeze or defer tax payment. Harrisonburg $30,000 $75,000 Income Exemption Income Exemption excludes 1 acre $0 - 15,000 80% $20,001 - 25,000 40% 15,001 - 20,000 60% 25,001 - 30,000 20% (Maximum: $1,000) Hopewell $32,500; $100,000 Income Exemption $4,000 exemption for excludes 1 acre $0 - 18,500 100% each non-spousal relative 18,501 - 32,500 50% (Maximum: $850) Lexington $30,000; first $6,000 $70,000 Income Exemption exempt for each excludes 1 acre $0 - 12,000 80% non-spousal relative 12,001 - 18,000 60% 18,001 - 24,000 40% 24,001 - 30,000 20% Lynchburg $32,500 $60,000 excludes 1 acre % Poverty % Relief Class 1 Class 2 Class 3 Class 4 150 100 $0 - 17,820 $0 - 24,030 $0 - 24,030 $0 -30,240 151-175 100 17,820 - 20,790 24,030 - 28,035 24,030 - 28,035 30,240 – 32,500 176-200 100 20,790 - 23,760 28,035 - 32,040 28,035 - 32,040 N/A 201-225 100 23,760 - 26,730 32,040 - 32,500 32,040 - 32,500 N/A 226-250 100 26,730 - 29,700 N/A N/A N/A 251-275 100 29,700 - 32,500 N/A N/A N/A Class 1: applicant (poverty income $11,880) Class 2: applicant + spouse (poverty income $16,020) Class 3: applicant + relative (poverty income $20,160) Class 4: applicant + spouse + relative (poverty income $24,300) Manassas $72,995 $340,000 Income Exemption excludes 1 acre $0 - 26,500 100% 26,501 - 56,150 100% up to $3,400 relief 56,151 - 64,573 25% up to $850 relief 64,574 - 72,995 15% up to $510 relief 72,996 and over 0% no relief Manassas Park $60,000 $150,000 Income Exemption excludes 1 acre $0 - 50,000 100% 50,001 - 60,000 50% Martinsville $27,500 $65,000 Income Exemption Income Exemption excludes 1 acre $0 - 12,500 100% $19,151 - 20,825 50% 12,501 - 14,150 90% 20,826 - 22,500 40% 14,151 - 15,825 80% 22,501 - 24,150 30% 15,826 - 17,500 70% 24,151 - 25,825 20% 17,501 - 19,150 60% 25,826 - 27,500 10% (Maximum: $400) N/A Not applicable 36 Tax Rates 2018 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Cities (continued) Newport News H.U.D. $200,000 Deferral to 100% income limits or $50,000 Norfolk $67,000 $350,000 Income Exemption $0 - 28,611 100% 28,612 - 36,958 80% 36,959 - 45,306 60% 45,307 - 53,653 40% 53,654 - 67,000 20% Norton $15,000 $25,000 100% exemption (maximum: $100). excludes 1 acre Petersburg $35,000; $70,000 100% exemption (to $1,200) for $0 to $25,000. first $4,000 exempt excludes 1 acre 50% exemption (to $1,200) for $25,001 to $35,000. for each non-spousal relative. The income of applicant, spouse, and all relatives is combined into one total, then the first $4,000 is exempt for each relative. The remaining income is considered the applicant's. Poquoson $48,600 $200,000 Income Exemption excludes 1 acre $0 - 25,000 100% 25,001 - 33,000 75% 33,001 - 41,000 50% 41,001 - 48,600 25% Portsmouth $50,000 $175,000 Income Exemption Income Exemption excludes 1 acre $0 - 21,000 100% $25,001 - 26,000 50% 21,001 - 22,000 90% 26,001 - 27,000 40% 22,001 - 23,000 80% 27,001 - 28,000 30% 23,001 - 24,000 70% 28,001 - 29,000 20% 24,001 - 25,000 60% 29,001 - 30,000 10% Income above $30,000 is eligible for freeze. Radford $24,000; $180,000a 100% exemption. $6,500 exempt excludes 1 acre for non-spousal relative Richmond $50,000 $200,000 excludes 1 acre Net Worth $0- 19,001- 37,001- 55,001- 100,001- 150,001- Income 19,000 37,000 55,000 100,000 150,000 200,000 $0 - 9,000 100% 100% 90% 80% 75% 70% 9,001 - 12,000 100% 100% 84% 71% 65% 60% 12,001 - 16,000 89% 80% 71% 62% 57% 50% 16,001 - 20,000 59% 50% 41% 33% 31% 30% 20,001 - 30,000 40% 35% 31% 27% 26% 25% 30,001 - 40,000 30% 25% 21% 16% 15% 15% 40,001 - 50,000 26% 22% 18% 14% 12% 10% Roanoke $42,000 $160,000 Elderly exemption is the amount by which the property tax for the year excludes 1 acre exceeds that for the year in which the owner qualifies. For the permanently and totally disabled, exemption is the amount by which the property tax for the year exceeds that for the year in which the owner qualifies. Salem $50,000 $100,000 Exemption is the amount by which the property tax exceeds the excludes 1 acre tax for the year in which the owner became 65. The same tax exemptions for persons determined to be permanently and totally disabled are granted whether they have reached the age of 65 or not.b Staunton $30,000 $62,500 excludes 1 acre Net Worth $0- 25,001- 31,251- 37,501- 43,751- 50,001- 56,521- Income 25,000 31,250 37,500 43,750 50,000 56,520 62,500 $0 - 18,000 100% 90% 80% 70% 60% 50% 45% 18,001 - 21,000 85% 75% 65% 55% 50% 45% 40% 21,001 - 24,000 70% 60% 55% 50% 45% 40% 35% 24,001 - 27,000 50% 45% 40% 35% 30% 25% 20% 27,001 - 30,000 35% 30% 25% 20% 15% 10% 5% a The city of Radford includes value up to $180,000 if house is included. Otherwise, the net worth limit is $70,000. b In the city of Salem, the head of the household occupying the dwelling and owning title, or partial title, or deeded life estate, must be 65 years or older on December 31st of the year immediately preceding the taxable year. Real Property Tax Relief Plans 37 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Cities (continued) Suffolk $57,150; $256,135 Income Exemption first $10,000 exempt excludes 10 acres $0 - 43,703 100% for non-spousal relative 43,704 - 50,427 50% 50,428 - 57,150 25% Modified every January 1st based on Consumer Price Index. Modification not to exceed 3.5% annually. Virginia Beach $70,137; $350,000 Income Exemption first $10,000 exempt excludes 10 acres $0 - 41,966 100% for relative 39,966 - 45,222 80% 45,222 - 48,474 60% 48,474 - 51,734 40% 51,734 - 54,989 20% 54,989 - 70,137 Tax freeze Waynesboro $30,000 $62,500 excludes 1 acre Net Worth $0- 25,001- 31,251- 37,501- 43,751- 50,001- 56,251- Income 25,000 31,250 37,500 43,750 50,000 56,250 62,500 $0 - 18,000 90% 85% 75% 65% 55% 50% 45% 18,001 - 21,000 85% 75% 65% 55% 50% 45% 40% 21,001 - 24,000 70% 60% 55% 50% 45% 40% 35% 24,001 - 27,000 50% 45% 40% 35% 30% 25% 20% 27,001 - 30,000 35% 30% 25% 20% 15% 10% 5% Williamsburg N/A N/A 100% deferral Winchester $40,000; $75,000 Income Exemption Income Exemption less $6,500 of income excludes 1 acre $0 - 25,000 100% $30,001 - 35,000 50% of each non-spousal relative 25,001 - 30,000 75% 35,001 - 40,000 25% (Maximum: $1,500) Counties (Note: All counties responded to the survey. Those that answered “not applicable” for all items in this table are excluded.) Accomack $28,000; $80,000 Income Exemption first $6,500 exempt excludes 1 acre $0 - 15,000 100% for each non-spousal relative 15,001 - 28,000 50% (Maximum: $500) Albemarle $69,452 $200,000 Net Worth excludes 10 acres $0- 100,001- 150,001- Income 100,000 150,000 200,000 $0 - 30,000 100% 90% 80% 30,001 - 50,000 70% 60% 50% 50,001 - 69,452 40% 30% 20% Alleghany $35,000; $100,000 Income Exemption first $6,500 exempt excludes 1 acr $0 - 25,000 100% for each non-spousal relative 25,001 - 30,000 75% 30,001 - 35,000 50% Amelia $30,000; first $100,000 Those certified as disabled can apply with the same $6,500 exempt for excludes 1 acre gross income and net worth requirement. each non-spousal relative Amherst $50,000; $150,000 Net Worth first $6,500 exempt excludes 1 acre $0- 110,001- 120,001- 130,001- 140,001- for each non-spousal relative Income 110,000 120,000 130,000 140,000 150,000 $0 - 20,000 100% 95% 90% 85% 80% 20,001 - 30,000 75% 70% 65% 60% 55% 30,001 - 40,000 50% 45% 40% 35% 30% 40,001 - 50,000 25% 20% 15% 10% 5% (maximum abatement is $600 per year.) Appomattox $20,000; $100,000 Income Exemption Income Exemption first $6,500 exempt excludes 1 acre $0 - 8,300 80% $13,311 - 14,980 60% for each non-spousal relative 8,301 - 9,970 75% 14,981 - 16,650 55% 9,971 - 11,640 70% 16,651 - 18,320 50% 11,641 - 13,310 65% 18,321 - 20,000 40% (maximum exemption $350) N/A Not applicable 38 Tax Rates 2018 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Counties (continued) Arlington $77,407 $340,000 Income Exemption $0 - 41,080 100% 41,081 - 51,560 50% exemption balance deferred 51,561 - 77,407 25% exemption balance deferred Augusta $40,000 $100,000 excludes 5 acres Net Worth $0- 25,001- 50,001- 60,001- 70,001- 80,001- 90,001- Income 25,000 50,000 60,000 70,000 80,000 90,000 100,000 $0 - 20,000 100% 90% 80% 70% 60% 50% 40% 20,001 - 24,000 90% 80% 70% 60% 50% 40% 30% 24,001 - 28,000 80% 70% 60% 50% 40% 30% 20% 28,001 - 30,000 70% 60% 50% 40% 30% 20% 10% 30,001 - 32,000 60% 50% 40% 30% 20% 10% ... 32,001 - 34,000 50% 40% 30% 20% 10% ... ... 34,001 - 36,000 40% 30% 20% 10% ... ... ... 36,001 - 38,000 30% 20% 10% ... ... ... ... 38,001 - 40,000 20% 10% ... ... ... ... ... Bath $50,000 $200,000 Net Worth excludes 10 acres $0 - 33,501- 66,801- 100,101- 133,401- 166,701- Income 33,500 66,800 100,100 133,400 166,700 200,000 $0 - 10,000 100% 90% 80% 70% 60% 50% 10,001 - 20,000 90% 80% 70% 60% 50% 40% 20,001 - 30,000 80% 70% 60% 50% 40% 30% 30,001 - 40,000 70% 60% 50% 40% 30% 20% 40,001 - 50,000 60% 50% 40% 30% 20% 10% Bedford $37,500 $100,000 85% of total tax with maximum of $1,000 or excludes 1 acre $500 minimum relief Bland $25,000; $75,000 100% exemption (maximum: $200). first $5,000 exempt excludes 1 acre for non-spousal relatives Botetourt $50,000; $185,000 Income Exemption first $8,500 exempt excludes $0 - 27,500 90% for non-spousal relatives 2 acres 27,501 - 35,000 70% 35,001 - 42,500 50% 42,501 - 50,000 40% Buchanan $25,000; $50,000 $125 exemption or amount of tax liability up to $125. first $5,000 exempt excludes 1 acre for non-spousal relatives Buckingham $35,000 $80,000 If values or tax rates are increased, the tax for eligible citizens excludes is frozen at the current amount of taxes. 10 acres Campbell $36,000; $82,000 Income Exemption first $10,000 exempt excludes 1 acre $0 - 27,000 100% for non-spousal relatives 27,001 - 31,000 75% 31,001 - 36,000 50% (maximum: $600) Caroline $40,000; $85,000 Net Worth first $6,500 exempt excludes 10 acres $0- 45,001- for non-spousal relatives Income 45,000 85,000 $0 -12,000 95% 80% 12,001 - 22,000 75% 60% 22,001 - 30,000 55% 40% 30,001 - 40,000 35% 20% Carroll $30,000; $100,000 100% of tax on house and one acre of land upon which first $6,000 exempt excludes 1 acre it is situated (maximum: $250). for non-spousal relatives Charles City $50,000; $150,000 Income Exemption first $10,000 exempt for excludes 5 acres $0 - 20,000 100% disabled applicant 20,001 - 30,000 75% 30,001 - 40,000 50% 40,001 - 50,000 25% (maximum: $1,000) Real Property Tax Relief Plans 39 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Counties (continued) Chesterfield $52,000; $350,000 Income Exemption first $10,000 exempt excludes 10 acres $0 - 27,200 100% for non-spousal relatives 27,201 - 39,000 60% 39,001 - 52,000 35% Clarke $55,000; $250,000 Income Exemption Income Exemption first $8,000 is exempt excludes 1 acre $0 - 20,000 100% $35,001 - 55,000 10% for non-spousal relatives 20,001 - 25,000 80% over 55,000 0% 25,001 - 30,000 60% 30,001 - 35,000 50% Craig $30,000 $90,000 Persons qualifying for this exemption shall be exempt from excludes 1 acre the amount of the taxes assessed against such property in an amount not to exceed $200 Culpeper $50,000; $200,000 Net Worth first $6,500 exempt excludes 10 acres $0- 50,001- 100,001- 150,001- for non-spousal relatives Income 50,000 100,000 150,000 200,000 $0 - 20,000 100% 80% 60% 40% 20,001 - 30,000 70% 50% 40% 30% 30,001 - 40,000 50% 35% 20% 15% 40,001 - 50,000 30% 25% 15% 10% Cumberland $22,000 $100,000 Maximum exemption $400 excludes 1 acre Dickenson N/A N/A $150 exemption. excludes 1 acre Dinwiddie $35,000; $100,000 Income Exemption first $5,000 exempt excludes 5 acres $0 - 35,000 100% for non-spousal relatives Essex $27,500 $100,000 Income Exemption excludes 1 acre $0 - 16,000 100% 16,001 - 20,000 80% 20,001 - 23,500 60% 23,501 - 27,500 40% (Maximum: $750 - Must be 65 years old or permanently and totally disabled.) Fairfax $72,000; $340,000 Income Exemption first $6,500 exempt excludes 1 acre $0 - 52,000 100% for non-spousal relatives 52,001 - 62,000 50% 62,001 - 72,000 25% Fauquier $58,000; $440,000 On house and up to five acres, 100% exemption. first $10,000 exempt excludes 5 acres for non-spousal relatives Floyd $20,650; $75,000 Subject to restrictions and conditions the article provides. first $6,000 exempt excludes 1 acre Exemption up to $200 for non-spousal relatives Fluvanna $50,000; $160,000 Net Worth first $12,500 exempt excludes 5 acres $0-40,001- 80,001- 120,001- for non-spousal relatives Income 40,000 80,000 120,000 160,000 $0 - 12,500 100% 75% 50% 25% 12,501 - 25,000 75% 57% 39% 20% 25,001 - 37,500 50% 39% 27% 15% 37,501 - 50,000 25% 20% 15% 5% Franklin $25,000; $80,000 Net Worth first $3,000 exempt excludes 5 acres $0- 12,001- 25,001- 35,001- 50,001- for non-spousal relatives Income 12,000 25,000 35,000 50,000 80,000 $0 - 9,000 90% 80% 70% 50% 35% 9,001 - 12,000 75% 65% 50% 30% 20% 12,001 - 15,000 65% 55% 40% 20% 10% 15,001 - 18,000 55% 45% 30% 10% 10% 18,001 - 25,000 45% 35% 20% 10% 10% 40 Tax Rates 2018 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Counties (continued) Frederick $50,000; $150,000 Income Exemption Income Exemption first $8,500 exempt excludes 1 acre $0 - 20,000 100% $25,001 - 30,000 35% for non-spousal relatives 20,001 - 25,000 60% 30,001 - 50,000 10% Giles $45,000 $65,000 Income Exemption Income Exemption excludes 1 acre $0 - 15,000 80% 25,001 - 35,000 40% 15,001 - 25,000 60% 35,001 - 45,000 20% Gloucester $35,000 $100,000 Income Exemption excludes 10 acres $0 - 20,000 100% of tax due 20,001 - 25,000 $775 max 25,001 - 35,000 $600 max Goochland $67,000; $250,000 100% exemption (maximum: $800). first $10,000 exempt excludes 10 acres for non-spousal relatives Grayson $23,500; $80,500 100% exemption (maximum $225). first $2,500 exempt excludes 1 acre for non-spousal relatives Greene $27,000; $100,000 Income Exemption first $6,500 exempt excludes 5 acres $0 - 10,000 100% for non-spousal relatives 10,001 - 18,000 75% 18,001 - 27,000 55% Greensville $30,000 $75,000 Up to $300 annual tax relief. excludes 1 acre Halifax $22,000 $60,000 Income Exemption excludes 1 acre $0 - 15,000 100% 15,001 - 20,000 75% 20,001 - 22,000 50% (maximum exemption $500) Hanover $50,000; $200,000 Income Exemption first $10,000 exempt excludes 10 acres $0 - 20,000 100% for non-spousal relatives 20,001 - 30,000 75% 30,001 - 40,000 50% 40,001 - 50,000 25% Henrico $67,000; first $10,000 of $350,000 100% relief up to $3,000 each relative excluded excludes 10 acres Henry $17,000 $50,000 Income Exemption Income Exemption excludes 1 acre $0 - 9,000 90% $12,001 - 13,000 50% 9,001 - 9,961 80% 13,001 - 14,000 40% 9,962 - 11,000 70% 14,001 - 15,000 30% 11,001 - 12,000 60% 15,001 - 16,000 20% 16,001 - 17,000 10% (maximum: $300) Isle of Wight $44,800; $187,700 Option to defer or taxpayer may exempt. first $6,500 exempt excludes 1 acre Income Exemption for non-spousal relatives $0 - 26,000 100% 26,001 - 32,300 75% 32,301 - 38,500 50% 38,501 - 44,800 25% (maximum: $1,000) James City $45,000; $200,000 The first $120,000 of assessed value is exempt. first $6,500 exempt excludes 10 acres for non-spousal relatives King and Queen $35,000 $60,000 Up to $500 exemption excludes 2 acres King George $40,000; $60,000 100% exemption. first $1,500 exempt for non-spousal relatives King William $50,000 $100,000 Up to $1,000 of tax relief per year. excludes 5 acres Lancaster $22,700; $100,000 Income Exemption first $5,000 exempt excludes 1 acre $0 - 15,800 100% for non-spousal relatives 15,801 - 17,801 80% 17,801 - 21,501 60% 20,501 - 22,700 40% Real Property Tax Relief Plans 41 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Counties (continued) Lee $25,000; $85,000 Income Exemption first $2,000 exempt excludes 1 acre $0 - 17,000 100% for non-spousal relatives 17,001 - 19,500 75% 19,501 - 22,000 50% 22,001 - 25,000 25% (maximum: $200) Loudoun $72,000 $440,000 100% exemption on home and up to three acres of land. excludes 10 acres Louisa $40,000; $100,000 $6,500 exempt for excludes 10 acres Net Worth non-spousal relatives $0- 25,001- 50,001- 75,001- Income 25,000 50,000 75,000 100,000 $0 - 18,000 100% 90% 80% 75% 18,001 - 29,000 90% 80% 70% 70% 29,001 - 40,000 70% 60% 50% 50% Maximum exemption: $1,000 Madison $30,000 $75,000 Taxpayers who qualify for deferral shall be entitled to have excludes 3 acres their total real estate tax remain at the amount of such tax for subsequent years until they no longer qualify for deferral. Mathews $35,000 $100,000 Income Exemption (elderly only) excludes 5 acres $0 - 23,000 100% 23,001 - 27,000 80% 27,001 - 31,000 60% 31,001 - 35,000 40% (maximum: $1,000) Middlesex $27,500; $100,000 Income Exemption first $3,000 exempt excludes 1 acre $0 - 13,000 100% for non-spousal relatives 13,001 - 16,000 80% 16,001 - 19,000 60% 19,001 - 22,000 40% 22,001 - 27,500 20% Montgomery $51,000 $150,000 Income Exemption excludes 1 acre $0 - 32,600 100% 32,601 - 40,800 60% 40,801 - 51,000 40% Deferral up to 100% Nelson $50,000; $100,000. Exemption based on sliding scale on income/net worth. first $3,000 exempt excludes 1 acre other than owner New Kent $50,000 $150,000 Income Exemption excludes 10 acres $0 - 15,000 $800 15,001 - 25,000 650 25,001 - 35,000 500 35,001 - 50,000 350 Northampton $22,000 $80,000 Percentage based on net worth and income. excludes 1 acre Northumberland $20,000 $100,000 Percentage based on net worth and income. excludes 1 acre Maximum of $400. Orange $40,000; $90,000 Net Worth first $7,500 exempt excludes 2 acres $0- 18,001- 36,001- 54,001- 72,001- for non-spousal relatives Income 18,000 36,000 54,000 72,000 90,000 $0 - 15,000 90% 80% 70% 60% 50% 15,001 - 20,500 80% 70% 60% 50% 40% 20,501 - 26,000 70% 60% 50% 40% 30% 26,001 - 31,500 60% 50% 40% 30% 20% 31,501 - 40,000 50% 40% 30% 20% 10% Page $21,500 $114,000 Income Exemption Income Exemption excludes 1 acre $0 - 14,000 100% $16,001 - 17,000 40% 14,001 - 15,000 80% 17,001 - 18,000 30% 15,001 - 16,000 60% 18,001 - 19,000 25% 19,001 - 21,500 20% Patrick $24,000 $100,000 Maximum exemption $300. excludes 1 acre 42 Tax Rates 2018 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Counties (continued) Pittsylvania $18,000; $60,000 Percentage relief from 20% to 90% based on first $4,000 exempt excludes 1 acre net worth and income. Maximum exemption is $300. for non-spousal relatives Powhatan $50,000; $200,000 Income up to $50,000 receives exemption of up to $800 off first $7,500 exempt for excludes 1 acre of taxes on one acre and home. disabled only; first $6,500 for non-spousal relatives Prince Edward $22,000 $150,000 Income Exemption excludes 1 acre $0 - 11,000 100% 11,001 - 22,000 50% Prince George $45,000 $120,000 Income Exemption excludes 5 acres $0 - 28,000 100% 28,001 - 45,000 50% Prince William $87,073; $340,000 Income Exemption deduct $7,500 of excludes 25 acres $0 - 60,500 100% disability income; 60,501 - 69,058 75% each relative deducts up 69,059 - 78,065 50% to $10,000 of income 78,066 - 87,073 25% Pulaski $25,000; $55,000 Income Exemption first $2,500 exempt excludes 3 acres $0 - 15,000 80% for non-spousal relatives 15,001 - 18,125 60% 18,126 - 21,250 40% 21,251 - 25,000 20% Rappahannock $31,360 $250,000 100% relief for income under $31,360 and net worth under. excludes 5 acres $250,000. 100% deferral for income under $31,360 and net worth under $350,000. Richmond 20,000 100,000 Income Exemption excludes 1 acre $0 - 14,000 100% 14,001 - 16,000 80% 16,001 - 18,000 60% 18,001 - 20,000 40% Roanoke $56,566 $200,000 Value of home and 1 acre frozen at prior years assessment excludes 1 acre as long as owner qualifies. Rockbridge $50,000; $200,000 Income Exemption first $10,000 exempt excludes 2 acres $0 - 18,000 80% for non-spousal relatives 18,001 - 28,000 60% 28,001 - 38,000 40% 38,001 - 50,000 20% Rockingham $38,000; $78,000 Net Worth first $6,500 exempt excludes 1 acre $0- 38,001- 58,001- for non-spousal relatives Income 38,000 58,000 78,000 $0 - 18,000 100% 75% 50% 18,001 - 23,000 80% 65% 40% 23,001 - 30,000 50% 40% 30% 30,001 - 38,000 25% 15% 10% over 38,000 0% 0% 0% Russell $30,000; $80,000 100% exemption (maximum: $165). first $2,500 exempt excludes 1 acre for non-spousal relatives Scott $30,000 $90,000 Maximum relief is $175. excludes 1 acre Shenandoah $30,000; $100,000 Income Exemption Income Exemption first $6,000 exempt excludes 5 acres $0 - 18,000 100% 24,001 - 26,000 50% for non-spousal relatives 18,001 - 20,000 80% 26,001 - 28,000 40% 20,001 - 22,000 70% 28,001 - 30,000 30% 22,001 - 24,000 60% over $30,000 0% Smyth $25,000; $65,000 Net Worth first $1,500 exempt excludes 1 acre $0- 28,501- 41,001- for non-spousal relatives Income 28,500 41,000 65,000 $0 - 10,000 80% 64% 56% 10,001 - 14,000 70% 55% 40% 14,001 - 18,000 55% 40% 30% 18,001 - 22,000 40% 25% 15% (maximum relief is $200.) Real Property Tax Relief Plans 43 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Counties (continued) Southampton $40,301; $168,501 Sliding scale from 25% to 100% relief based on gross income first $6,000 exempt excludes 1 acre and net worth. for non-spousal relatives Spotsylvania $50,000; $200,000 100% exemption (maximum: $1,200). first $5,500 exempt excludes 10 acres for non-spousal relatives Stafford $40,000; $400,000 100% exemption: $35,000 income; max. net worth $300,000 first $4,000 exempt excludes 2 acres 50% exemption: $30,000 income; max. net worth $400,000 for non-spousal relatives 50% exemption: $40,000 income; max net worth $200,000 Surry $30,000; $100,000 Income Exemption first $6,500 for excludes 1 acre $0 - 15,000 100% non-spousal relatives 15,001 - 20,000 75% 20,001 - 25,000 50% 25,001 - 30,000 25% (Maximum: $500) Tazewell $30,000 $75,000 100% exemption. (elderly only) excludes 1 acre (Maximum: $300) Warren $35,000 $150,000 Income Exemption excludes 5 acres $0 - 20,000 100% 20,001 - 25,000 75% 25,001 - 30,000 50% 30,001 - 35,000 25% Washington $27,995 $100,000 Sliding scale from 14% to 80% relief based on gross income excludes 5 acres and net worth. Westmoreland $20,000 $60,000 65 years or older or permanently and totally disabled for a tax excludes 1 acre relief amount of up to $300. Must file by May 1st of each year. Income Exemption Income Exemption $0 - 14,000 100% $16,001 - 18,000 60% 14,001 - 16,000 80% 18,001 - 20,000 40% Wise $42,000; $85,000 Maximum $200 exemption. $4,000 exempt excludes 1 acre for non-spousal relatives Wythe $30,000; $80,000 $200 exemption. first $5,000 exempt excludes 1 acre for non-spousal relatives York $50,000; $200,000 Income (1 Owner) Income (2 Owners) Exemption exempt $10,000 of income excludes 10 acres $0 -19,550 $0 - 22,350 100% for non-spousal relatives 19,551 - 29,700 22,351 - 31,567 up to $600 29,701 - 39,850 31,568 - 40,784 up to $420 39,851 - 50,000 40,785 - 50,000 up to $300 44 Tax Rates 2018 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Towns (Note: Towns that answered “not applicable” for all items in this table are excluded. For a listing of town respondents and non-respondents, see Appendix B.) Abingdon $25,487; $100,000 Net Worth first $2,500 exempt excludes 1 acre $0- 33,001- 66,001- for non-spousal relatives Income 33,000 66,000 100,000 $0 - 10,263 80% 64% 56% 10,264 - 15,227 60% 48% 42% 15,228 - 20,356 40% 32% 28% 20,357 - 25,487 20% 18% 14% Altavista $34,500; $80,900 Income Exemption first $10,000 exempt excludes 1 acre $0 - 25,900 100% for non-spousal relatives 25,901 - 30,200 75% 30,201 - 34,500 50% (Maximum: $500) Ashland $50,000 $200,000 .Income Exemption $0 - 20,000 100% 20,001 - 30,000 75% 30,001 - 40,000 50% 40,001 - 50,000 25% Bedford $15,000 $40,000 Income Exemption Income Exemption excludes 1 acre $0 - 4,000 100% $8,001 - 9,000 50% $4,001 - 5,000 90% $9,001 - 10,000 40% $5,001 - 6,000 80% $10,001 - 11,000 30% $6,001 - 7,000 70% $11,001 - 12,000 20% $7,001 - 8,000 60% $12,001 - 15,000 10% Big Stone Gap $42,000; $85,000 Maximum exemption is $150. first $4,000 exempt for non-spousal relatives Blacksburg $51,000; $150,000 Income Exemption Deferral first $10,000 exempt $0 - 32,600 100% 0% for non-spousal relatives 32,601 -40,800 60% 40% 40,801 - 51,000 40% 60% Bluefield $25,000 $75,000 100% exemption. up to $200. (elderly only) excludes 1 acre Bridgewater $11,000; $30,000 Net Worth first $2,000 exempt $0- 15,001- 20,001- 25,001- for non-spousal relatives Income 15,000 20,000 25,000 30,000 $0 - 6,500 80% 64% 56% 40% 6,501 - 8,000 60% 48% 42% 30% 8,001 - 9,500 40% 32% 28% 20% 9,501 - 11,000 20% 16% 14% 10% Broadway $18,000 $50,000 N/A (elderly only) Brookneal $22,000; $60,000 Income Exemption first $2,500 exempt $0 - 10,000 100% for non-spousal relatives 10,001 - 12,000 80% 12,001 - 14,000 70% 14,001 - 16,000 60% 16,001 - 18,000 50% 18,001 - 20,000 40% 20,001 - 22,000 30% (maximum: $300) Cape Charles $22,000 $80,000 Income Exemption excludes 1 acre $0 - 16,000 90% 16,001 - 17,500 80% 17,501 - 19,000 70% 19,001 - 20,500 60% 20,501 - 22,000 50% (maximum: $300) Chilhowie $22,000 $35,000 Up to 100% exemption excludes 1 acre N/A Not applicable. Real Property Tax Relief Plans 45 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Towns (continued) Christiansburg $51,000 $150,000 Income Exemption $0 - 32,600 100% 32,601 - 40,800 60% 40,801 - 51,000 40% Clifton Forge $25,000 $55,000 Up to 100% exemption Clintwood $37,000 $75,000 N/A excludes 1 acre Colonial Beach $22,500 or $100,000 Maximum exemption is $600 $32,000 with partner Culpeper $50,000; $200,000 Sliding scale of net worth/income determine exemption. first $6,500 exempt excludes 1 acre for non-spousal relatives Dublin $23,200; $55,000 Income Exemption first $2,500 exempt excludes 3 acres $0 - 15,000 80% for each relative 15,001 - 18,500 60% 18,501 - 21,000 40% 21,001 - 23,200 20% Floyd $17,000; $55,000 $50 deduction from real estate bill for each year that such first $6,000 exempt person qualifies for relief. for non-spousal relatives Front Royal $15,444 $100,000 Deferral or exemption. excludes 1 acre Grundy $16,500 $50,000 Determined by Buchanan County code. Hamilton $72,000 $440,000 All owner(s) of the dwelling, excluding the spouse, are at least excludes 3 acres65 years of age or premanently and totally disabled.The title of the dwelling is held by the applicant(s) seeking relief. The applicant(s) may reside in a hospital or nursing home for physi cal or mental care; however, to qualify for real property tax relief; the dwelling may not be rented for monetary compensation. Haymarket $71,300; $340,000 100% exemption if income is less than $22,000. 100% deferral exempt $10,000 excludes 1 acre if income is less than 85% of HUD low income limit; 75% defer- for non-spousal relative; ral if income is less than 90% of HUD low income limit; 50% exempt $7,500 of disabled deferral if income is less than 95% of HUD low income limit; 25% deferral if income is less than HUD low income limit. Herndon $72,000 $340,000 Income Exemption excludes 1 acre $0 - 52,000 100% 52,001 - 62,000 50% 62,001 - 72,000 25% Hillsville $23,000; $80,000 50% exemption. first $6,000 exempt excludes 1 acre (Maximum: $74.50) for others in household Independence $5,000 $10,000 Deferred taxes attached as lien on property and collected at excludes 1 acre time of sale. Lebanon $27,000; $75,000 50% exemption. Maximum $150. first $2,500 exempt excludes 1 acre for non-spousal relatives Leesburg $72,000 $440,000 100% exemption. excludes 10 acres Louisa $35,000 $85,000 N/A Luray $21,500 $114,000 Income Exemption Income Exemption excludes 1 acre $0 - 14,000 100% $18,001 - 19,000 25% 14,001 - 15,000 80% 19,001 - 20,000 20% 15,001 - 16,000 60% 20,001 - 21,500 10% 16,001 - 17,000 40% over 21,500 0% 17,001 - 18,000 30% Marion $22,000 $35,000 50% exemption. Narrows $25,000 $35,000 Determined by Giles County code. (elderly only) N/A Not applicable. 46 Tax Rates 2018 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Towns (continued) New Market $30,000 $100,000 Income Exemption $0 - 18,000 100% 18,001 - 20,000 80% 20,001 - 22,000 70% 22,001 - 24,000 60% 24,001 - 26,000 50% 26,001 - 28,000 40% 28,001 - 30,000 30% Onancock $28,000 $80,000 Determined by Accomack County code. Orange $40,000 $90,000 Net Worth() $0- 18,001 - 36,001 - 54,001 - 72,001 Income 18,000 36,000 54,000 72,000 90,000 $0-15,000 90% 80% 70% 60% 50% 15,001 - 20,500 80% 70% 60% 50% 40% 20,501 - 26,000 70% 60% 50% 40% 30% 26,001 - 31,500 60% 50% 40% 30% 20% 31,501 - 40,000 50% 40% 30% 20% 10% Pamplin $15,000; $90,000 Determined by Appomattox County code. first $6,500 exempt for non-spousal relatives Pulaski $25,000 $55,000 Income Exemption excludes 3 acres $0 - 15,000 80% 15,001 - 18,125 60% 18,126 - 21,250 40% 21,251 - 25,000 20% Purcellville $72,000; $440,000 Exemption: Amount by which the real estate tax exceeds 0.5% first $10,000 exempt excludes 10 acres of gross combined income. Deferral: up to 100%. for non-spousal relatives Remington $52,000; $195,000 100% exempt if qualified. first $8,500 exempt for non-spousal relatives Rocky Mount $25,000 $80,000 Net Worth excludes 5 acres $0- 12,001- 25,001- 35,001- 50,001 Income 12,000 25,000 35,000 50,000 80,000 $0- 5,000 95% 85% 75% 65% 40% 5,001 - 9,000 85% 75% 65% 40% 30% 9,001 - 12,000 75% 65% 50% 30% 20% 12,001 - 15,000 65% 55% 40% 20% 10% 15,001 - 18,000 55% 45% 30% 10% 10% 18,001 - 21,000 45% 35% 20% 10% 10% Round Hill $52,000 $195,000 Determined by Loudoun County code. Smithfield $30,000 $150,000 Determined by Isle of Wight County code. Strasburg $30,000 $100,000 Income Exemption excludes 1 acre $0 - 18,000 100% 18,001 - 20,000 80% 20,001 - 22,000 70% 22,001 - 24,000 60% 24,001 - 26,000 50% 26,001 - 28,000 40% 28,001 - 30,000 30% Tazewell $25,000 N/A Determined by Tazewell County code. Vienna $72,000 $340,000 Income Exemption $0 - 52,000 100% 52,001 - 62,000 50% 62,001 - 72,000 25% Vinton $56,600; $200,000 100% exemption. first $6,500 exempt excludes 1 acre for non-spousal relatives N/A Not applicable Real Property Tax Relief Plans 47 Table 3.1 Real Property Owner Tax Relief Plans for the Elderly and Disabled, 2018 (continued) Combined Combined Locality Gross Income Net Worth Relief Plan/Exemption Towns (continued) Warrenton $58,000; $440,000 100% exemption. first $10,000 exempt excludes 1 acre for non-spousal relatives West Point $20,000 $60,000 Exemption Wise $42,000; $85,000 100% exemption. first $4,000 exempt excludes 1 acre for non-spousal relatives Woodstock $30,000 $100,000 Income Exemption excludes 1 acre $0 - 15,000 100% 15,001 - 17,500 80% 17,501 - 20,000 70% 20,001 - 22,500 60% 22,501 - 25,500 50% 25,501 - 27,000 40% 27,001 - 30,000 30% Wytheville $15,000; $50,000 100% exemption (maximum: $75.00). first $5,000 exempt for non-spousal relatives N/A Not applicable. 48 Tax Rates 2018 Table 3.2 Real Property Renter Tax Relief Plans for the Elderly and Disabled, 2018 Combined Combined Locality Gross Income Net Worth Relief Plan Cities (Note: Only cities that responded to the items in this table are listed.) Alexandria $25,600; renters may deduct first $75,000 Monthly Maximum $7,500 of disability income & first Income Grant Annual Benefit $6,500 for each roommate $ 0 - 15,000 $500 $6,000 15,001 - 21,000 375 4,500 21,001 - 25,600 250 3,000 Charlottesville $50,000; first $7,500 of $100,000 Relief equals the amount derived permanent disability compensation by subtracting 24% of previous year’s exempt; first $8,500 for non-spousal gross combined income from actual rent or relative exempt 6,000 for previous year, whichever is less. Multiply excess by 25% to obtain amount. Fairfax $40,000; first $7,500 exempt $150,000 10% of annual rent payment up to $2,000. for disabled; first $6,500 exempt for each relative Falls Church $38,050 $150,000 Varies based on income and assets; maximum grant of $1,700 annually. Hampton $31,000 $200,000 Criteria the same as for owners Counties (Note: Fairfax was the only county that responded to the items in this table.) Fairfax $22,000; first $6,500 exempt $75,000 The grant total is based on the amount of for each relative rent paid for the dwelling during the grant year that exceeds 30% of income. Towns (No towns responded as having rental relief plans.) Real Property Tax Relief Plans 49