HENRICO COUNTY, Va. -- Henrico County officials announced a two-part plan Friday to help residents with higher than expected personal property tax bills — a plan to give back more than $20 million to taxpayers.
The surplus is due to the rising estimated value of used cars, boats, and motorcycles. According to officials in multiple Central Virginia counties, tax assessors are required by law to assign a fair market value for vehicle assessments using a recognized pricing guide. Most localities use the JD Power Used Car Guide for the Eastern Region.
Because of high demand and limited supply for used cars, prices skyrocketed in 2021, which in turn drove up assessed value.
“This is not the county’s money,” Henrico County Manager John Vithoulkas said. “We did not anticipate it or budget it. It belongs to our taxpayers. Just as they did with the unanticipated real estate revenue, our supervisors want to return this money – every single penny – to its rightful owners, the taxpayers of Henrico County.”
Officials said the first of the plan will be to give people more time to pay the first half of their personal property tax (residents are sent two bills each year). At next week's Board of Supervisor's meeting, they will vote on emergency ordinance to move the due date from June 6 to August 5, with no penalties or interest.
The second part will happen once a change to a state law takes effect July 1 that allows localities to return surplus personal property tax revenues to residents.
Under the proposal, Henrico would effectively reduce the personal property tax rate by 52 cents for the year (from $3.50 to $2.98 per $100 of assessed value).
"Individual credits would be applied to the second installment of personal property bills, due Dec. 5, and would provide a reduction of $62.40 for the owner of the average vehicle valued at approximately $12,000," a county spokesperson said.
The exact amount of money returned to taxpayers will be determined once the fiscal year ends on June 30.
"Officials had projected personal property tax revenues to increase by 15% when they drafted the county’s budget for fiscal 2022-23," a statement from Henrico County read. "However, the increase now stands at 35% – or $20.4 million above projections – due to higher-than-expected vehicle values stemming from supply chain disruptions and other economic forces from the COVID-19 pandemic."
Henrico leaders said they believed they were the first city or county in Virginia to return both a surplus real estate and personal property tax monies to taxpayers in the same year.
“Henrico is committed to keeping taxes low and pushing them lower,” Vithoulkas said. “We are committed to being good stewards and doing what is right by our taxpayers. That is our promise.”
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