HENRICO COUNTY, Va. (WRIC) — Henrico County has introduced an ordinance to offer a first-ever real estate tax credit to property owners.
The Henrico County Board of Supervisors met Tuesday to discuss a proposal that would give property owners a one-time credit on their real estate taxes.
The county is calling it “2+2,” and County Manager John Vithoulkas announced the tax credit as a part of a their proposal during the 2021 State of the County address in December.
Vithoulkas said the credit and a proposed 2-cent reduction of the real estate tax rate would help taxpayers manage the impact of sharply rising real estate values — which lead to increased assessments.
The county said home prices have jumped by 30% to 50% in some areas and, by law, local real estate assessments must reflect 100% of property’s fair market value.
The Board of Supervisors have scheduled a public hearing and a potential vote for February 22 on the real estate tax credit.
With the introduction of the proposed ordinance, Henrico could be the first locality in Virginia to return surplus real estate taxes to property owners under a 2005 state law.
“This is yet another way that Henrico is demonstrating our financial stewardship and transparency to our citizens,” said Sheila Minor, director of the Department of Finance. “The county collected real estate revenue last fiscal year in excess of the budget and provided an exceptional level of service to our citizens, even during a pandemic. We expect to continue those trends in the current fiscal year. Given the real estate market, the county wants to provide real tax relief to those who are seeing their property values increase.”
If the credit is approved, homeowners and other property owners will receive an amount equal to 2 cents per $100 of their real estate’s taxable value for 2022.
The county provided an example: A home with the average assessed value of $322,200 would generate a credit of $64.44. ($322,200/100 x .02=$64.44)
Credits of $30 or more would be paid by checks issued in early March 2022. The county said smaller amounts of money would be credited directly on real estate tax bills for the year.
If you owe delinquent taxes, the credit would be applied to your outstanding balance and to any future bills if the credit exceeds the amount due.
If you are a property owner who pays your taxes through an escrow account, you may not see your credit reflected until later in the year when accounts are reconciled.
The county’s finance department plans to establish a phone number in March for taxpayers to call if there are questions about their credit or the tax bill.
The Board of Supervisors will likely approve the 2-cent real estate tax rate reduction when it adopts the 2022-23 fiscal budget.
The budget will be proposed to the Board of Supervisors in March by the County Manager and will be balanced on a real estate tax rate of 85 cents, which would be dropped 2 cents from the current rate of 87 cents.
The 85 cent rate would be applied to real estate tax bills issued in April and October, if approved. By cutting the rate, Henrico would forgo $10 million in revenue that would have been collected.
With $10 million returned to taxpayers by the real estate credit, the combined relief offered through the 2+2 proposal would total $20 million, according to the county.
The average assessed home value in Henrico is $322,200 for 2022 — which was a jump from $290,600 in 2021.
Based on those values, homeowners would face an increase in real estate taxes of $275 without the credit and rate reduction. With the tax relief proposals by the county, the average tax bill would total $2,674 and reflect a smaller increase of $146.