A recently proposed amendment to the Virginia Constitution could give localities the opportunity to lower property taxes by offering homeowners a real estate assessment rebate of up to 20 percent.
Should the bill proposing the amendment pass this session in the House of Delegates and Senate, Virginia citizens will vote on the measure by public referendum Nov. 4. It is unclear, however, whether the proposed amendment will relieve the heaviest tax burdens -- which are often of concern to moderate- to low-income homeowners -- more efficiently than pre-existing programs, Charlottesville Mayor Dave Norris said.
According to Jeff Tiller, spokesperson for Gov. Tim Kaine, "a homestead exemption would allow a Virginia locality such as Charlottesville to exempt homeowners from 20 percent of the value of their home."
The exemption would target homeowners instead of commercial property owners, Tiller said, adding that in recent years, homeowners -- especially in the Charlottesville area -- have faced mounting tax pressures greater than their commercial counterparts.
Charlottesville citizens have seen their property taxes steadily rise as their houses continue to appreciate, totaling a 15 percent increase in the past year, Norris said, noting that "the city has seen double-digit increases in property taxes for a number of years now."
According to Charlottesville City Council member David Brown, the amendment might also help offset the rise in real estate taxes.
For Charlottesville, however, the amendment may not be as effective as citizens might hope, according to both Norris and Brown.
"The homestead exemption would give a proportionally larger tax cut to wealthy homeowners instead of moderate- to low-income homeowners," Norris said, adding that the 20 percent exemption would be more beneficial for wealthy homeowners who pay higher taxes.
Brown echoed Norris' sentiment, adding that the need for tax relief will also depend on the ever-changing real estate climate.
Charlottesville real estate taxes are expected to plateau or even lower this year as the real estate market settles, Brown said, and if the new trend continues, there may not be a need to implement the homestead exemption.
"The answer to the tax pressures should be a targeted tax relief program," Norris said.
Targeted relief has been a recent focus of Council and according to Norris, Council already has a tax rebate program in place to aid moderate- to low-income homeowners.
"In my opinion, our tax rebate system is a better model than the homestead exemption," he said.
State legislators, Council and Charlottesville homeowners will continue to evaluate the possible consequences of the proposed amendment during the current legislative session.
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