Hoping to counter the impact that skyrocketing real estate values are having on Northern Virginia homeowners, members of the General Assembly's Arlington delegation have proposed legislation that would give property owners a partial tax exemption that could lower their annual tax bills.
Under the terms of the House joint resolution, legislators are proposing a constitutional amendment that would allow any county, city or town to exempt up to $100,000 of the value of any owner-occupied home from taxation.
DEL. ROBERT H. BRINK
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Del. Robert H. Brink (D-Arlington), one of the bill's chief patrons, said the resolution's aim is twofold: To lessen the sting felt by homeowners -- many of whom have seen their assessments and resulting tax bills rise dramatically over the last four years -- and to equalize the tax burden between residential and commercial property.
Brink said the idea was born from the growing problem in Arlington County, where residential property assessments soared 24 percent this year.
In 2005, the average assessed value of a single-family home in Arlington increased from $369,600 to $458,200, bringing the total jump in assessments over the past three years to 70 percent. Arlington's property tax rate is 95.8 cents per $100 in assessed value; the average homeowner would pay $4,389 in taxes this year if the rate remains unchanged.
While Virginia's constitution mandates that all property -- residential and commercial -- be taxed uniformly, Brink said the resolution would give homeowners the financial relief they need while allowing jurisdictions, such as Arlington, to derive more revenue from commercial property taxes.
"One of the phenomena of the real estate market over the past few years is that home assessments have gone up so much more than commercial have," Brink said. "This is the solution we came up with."
Without the right to levy income taxes on their residents, Virginia localities depend heavily on real estate tax revenue. In addition, there is no cap on property tax increases, as there is in Maryland and the District.
Arlington County Board Chairman Jay Fisette (D) said the homestead exemption emerged from a need to provide what he called "targeted homeowner property tax relief."
Fisette said the amendment would not mandate that jurisdictions use the exemption but would give local governments a tool to provide greater equity between commercial and residential property taxes.
This year, single-family residential property will account for 59 percent of the county's real estate tax base. That's up from 52 percent in 2002.
Meanwhile, Fisette said, commercial property in the county accounts for 28 percent of the same tax base.
"I think it's fair to say the restriction on local governments to assess all property -- commercial and residential -- at the same rate in theory is fine," Fisette said. "But in practice, in recent years, with the much higher rate of appreciation of residential property, it has created a growing imbalance. A homestead exemption is a way of providing what one might call a somewhat progressive, targeted approach to redress that imbalance."
Brink said the amendment would require a voter referendum, which would occur, at the earliest, in November 2006.
