RICHMOND, Va. (WRIC) — The value of new and used vehicles in Richmond surged this year. In order to offset the increased tax burden, the city is increasing the amount of automatically applied Personal Property Tax Relief. Here’s how it works…
The COVID-19 impact on vehicle values for 2022
The city uses values from the National Automobile Dealers Association (NADA) to determine personal property taxes for most vehicles. Prior to COVID-19, vehicle values were typically depreciating month to month. However, since March 2020, valuations have surged.
The combination of global supply chain shortages, historically low-interest rates and large companies not replacing inventory has resulted in a scarcity of supply for vehicles in the market. This scarcity has resulted in a swell of valuation.
As a result of the increased vehicle valuations, personal property taxes have naturally increased as well. However, the city has implemented a strategy to minimize the impact on taxpayers.
Freezing the PPTRA Rate to provide additional relief
In accordance with the Commonwealth’s Personal Property Tax Relief Act (PPTRA), the City of Richmond receives a set amount of funds to provide relief.
These funds are usually the same amount every year, meaning that as vehicle values grow, the PPTRA rate decreases.
However, the surge in valuations for 2022 has resulted in a sudden drop of 20% in the calculated relief rate. This means taxpayers will be required to pay significantly more than in previous years. As a result, the city has decided to freeze the PPTRA rate.
What is the effect of freezing the PPTRA rate? The freeze will result in qualifying personal property taxpayers paying less than they otherwise would.
An example provided by the City of Richmond goes like this; if your vehicle is valued at $18,030, the total tax would be $667. At the calculated PPTRA rate of 30%, you would be required to pay $464, but with the frozen rate of 50%, you only pay $331. In this example, the rate freeze creates a savings of $133.
The frozen PPTRA rate is automatically applied to those that qualify, and there is no action required to opt in. The city anticipates that the additional amount of relief provided will be more than $8 million.
Most vehicles are eligible for PPTRA but a few exceptions do exist and they can be found here.
How to pay your Personal Property taxes online or by mail
The City of Richmond has mailed personal property tax bills and are also available online. Tax returns are due on June 5, 2022. Taxpayers can either pay online by visiting RVA.gov or mail their payments.
As June 5 falls on a Sunday, all mailed payments postmarked on or before June 6 will avoid penalties and interest for late payment.
Do you have an issue or a question related to your personal property tax bill? Please call RVA311 by dialing 311 locally, visit RVA311.com, or download the RVA311 app on your Apple or Android device.