Property Tax Assessments in Northern Virginia

Washington Post staff writer Amy Gardner was online Monday, March 6, at noon ET to examine rising property tax assessments in Northern Virginia.

Read More:

Northern Virginians Greet Assessments With Disbelief (Post, March 6)

Related Link :

Special Report: Housing Market

The transcript follows.

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Amy Gardner: Hi everyone, thanks for joining us. I'm going to take a stab in the dark and guess that there's some sticker shock out there.

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Fairfax Station, Va.: Last year Fairfax County cut the property tax rate 13 cents. This year they're only cutting 7 cents. I'm not sure what the average percent increase in assessment was last year but I'm pretty sure that this years was more. Given all of this, it seems like Fairfax County is seeking/sneaking a tax increase by not cutting the tax rate more. Do you think that they should have cut the property tax rate by more than 7 cents to even out the raise in assessments? My neighbors and I are not happy with the increase!

Amy Gardner: That's a great question -- but a really subjective one. It all depends on what you expect out of government. Let me talk about Loudoun County, because that's where I work and I know more about it than Fairfax. In Loudoun, spending -- and tax bills -- have been going up about 15 percent a year. Lately they've been able to lower the tax rate but continue that growth trajectory. This year they're proposing a 7-cent reduction, just like Fairfax. They won't be able to do that when values level off, of course -- but they'll still face the demand for new schools, libraries, police officers, and all that stuff.

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Washington, D.C. (20001): How about D.C. Tax Assessments, Northern Virginia assessments pale in comparison. How can someone's property tax rate go up 135 percent in one year? Aren't assessments supposed to reflect something other than "Market value"?

Amy Gardner: Great question. We ran a story in November 2005 about rising D.C. values, and you're right, they are rising even more dramatically than in NoVa. I think the example cited in the story was of a Northwest restaurant owner whose assessment rose 150 percent, from $438,310 to $1.1 million. I think the lighthearted anecdote was that the restaurant would have to sell something like 4,000 more chili dogs just to cover the additional taxes.

More seriously, although the District's values are certainly rising more steeply than in most of Northern Virginia, the District imposes a cap on the amount your tax bill can actually rise each year. Unfortunately for business owners, that applies only to residents.

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Alexandria, Va.: I am sorry, perhaps it is short-sighted of me but boo hoo, if house assessments are closer to what people are actually paying for the houses in this area. That "extra" money that the state receives can then be put back into the community to provide affordable housing for folks like me who can't buy a place because they don't have a six figure salary. It might allow teachers and other public servants to live where they work and to allow people in general to live near where they work to cut down on the horrible traffic we have now. If your assessment is in line with what you can sell your house for, but you bought more than you can pay for or you don't feel like selling, I have no sympathy, if it is out of line with what you can sell it for, there should be records, go and appeal your assessment. By and large assessments tend to be far under what your house is actually worth.

Amy Gardner: Rising assessments are definitely a double-edged sword. We like the equity we earn, but we hate the tax bill. You also raise a good point about how many folks are squeezed out of the market. Loudoun County, where I work, used to be a more affordable outer suburb. Now, average single-family home prices are in the 600s. Folks in Purcellville are moving to West Virginia to find affordable homes.

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Riverdale Park, Md.: Hello Amy,

What's wrong with rising assessments? Who doesn't want their house to become more valuable?

The real problem isn't rising assessments, but the unchanging tax rate. If you want lower taxes, campaign for a lower rate, not a lower assessment!

The distinction might seem like a mathematical nicety, but wanting a lower assessment is like wanting to be taller or more intelligent---that is, wanting the real world to be different.

Amy Gardner: If folks really want the rate to be lowered enough to fully equalize the tax bill, then they'll have to ask their boards of supervisors or town councils to make some tough choices about spending. Something's got to give, whether it's the tax rate or the new roads, schools, rec centers, and all the other service demands this growing region's population places on its elected officials.

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North Springfield, Va.: I live in Fairfax county, Va. My assessment went from $531,520 in 2005 to $806,360 this year. I've done on major improvement whatsoever. If my math is correct, that's a 51 percent increase. I think the assessment is too high. Should I dispute the assessment and ask for an appeal ? Is it worth it ? Will I end up paying more in future anyway ?

The neighbor across the street just bought their house (a week or so ago) for the very same value as I'm currently asses. I thought they paid too much anyway.

If the re-assessment is supposed to be done effective Jan 1st (of every year). Can I argue that they can't use the neighbor's sale figures (of last week). And 12 months ago the same neighbor's house was sold for $100,000 less (previous neighbor died).

Perhaps they under-asses last year but I'm not gonna say that.

Can I use the argument that the property in the area has not appreciated 51% from last year ?

Also I read that in Fairfax county, the "average" increase in assessment this year is about 20 percent for the whole county (Fairfax, VA). So why am I getting a 51 percent increase ?

Thank you for taking my questions and any advice is appreciated.

Amy Gardner: That sale across the street won't help your case, but if you genuinely feel the assessment is inaccurate, then by all means, you should appeal it. I'm not familiar with the process everywhere, but in Virginia there are usually two ways to appeal. You can call your city or county assessor's office and ask for a review. If they agree they've made a mistake, they'll change the assessment. (it does happen, believe it or not). If you're not happy with their ruling, you can file a formal hearing with what's called the Board of Equalization, which is appointed by your local Board of Supervisors or City Council. Your assessor's office can walk you through. Be aware that there's usually a deadline for appealing, so you should look into it quickly if you're going to do it.

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Loudoun County, Va.: Isn't it true that the real issue here is that local governments are utterly obsessed with monstrous spending? They do it by the truckload, and have awoken to realize that if they double the assessed value of a big house over a year or two, they can fund more and more and more spending. These county governments are drunk with their spending power here, and it will never end. Loudoun is racing to catch up to much of Fairfax, in that one area we can all be proud of: simply too expensive to live here. Your thoughts?

Amy Gardner: Well of course I'm not going to weigh in with an opinion, but you're certainly not alone in thinking that spending is growing too quickly in Loudoun. You can have a say in the process, though. The county supervisors held two public hearings on its budget last week. County Administrator Kirby Bowers has proposed a spending increase of about 16 percent, he says to accommodate growth in population and services.

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Vienna, Va.: Our property was assessed at $515K. That's about $100K over last year's assessment. We would gladly let the county buy our property for $515K. Any takers at FF county?

Amy Gardner: If you don't think it's really worth that, then you should appeal. That's about a 25 percent increase, right? A little higher than the Fairfax average of 20.5 percent for a single-family home this year. Check out the market data -- it's pretty easy to look for on Fairfax's tax database. Good luck.

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Washington, D.C.: Two questions: #1 are all DC prop tax assessments sent in the spring, or are some sent later in the year? #2 can you explain the homestead exemption and how it lowers the overall prop tax bill for a co-op? Thanks

Amy Gardner: I plead total ignorance to D.C. tax policy. Anyone want to weigh in?

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Fairfax, Va.: Am I suppose to feel sorry for these people whining about huge tax assessment increases? For years, I kept hearing about people claim how smart they were to buy a home and how wealthy they were due to the price increases and their home's value, etc, and now they are whining about a huge assessment jump. Well, people, you cant have it both ways. Welcome to reality.

Amy Gardner: Just thought I'd throw this out there.

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Reassessed in MoCo: I know your article centers on VA, but I live in Montgomery County (Gaithersburg), and my new assessment is definitely too high. I contested and my hearing is next week. I printed out the sheets from the state tax Web site of what I consider comparative properties (same neighborhood, same model condo), but is there any way I can get more detailed info on the units that sold (like what is on the actual real estate listings)? Is that public information?

Thanks!!

Amy Gardner: The first thing I would do is call the assessor's office and ask what *they* based the assessment on. Put the burden on them. Everything they used to come up with the figure is public information. One thing to keep in mind is that Md. localities assess only every three years. So you're going to see a much bigger jump because the market has come so far in three years' time.

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Washington, D.C.: Not a question, just a comment - I think that people get so bent out of shape about property taxes because of how they are billed. Property tax bills are generally sent out twice a year. If they were sent out monthly, they would probably average out to be less than a person's cable bill. Property taxes are a good, stable source of revenue for very cash-strapped local governments. People expect local governments to do and provide all sorts of services for them, but balk at the idea of increased taxes. States regulate heavily how local governments collect their revenue. The local property tax is a stable, efficient source of revenue and I, for one, and happy to pay for them - even if they increase from time to time.

Amy Gardner: Most tax policy gurus I've ever talked to say the property tax is a great source of revenue for local governments -- so long as it's one of several. The problem folks point to about Virginia local governments is that they rely too heavily on the property tax to finance government -- even though property is only one measure of wealth. If I've got a family farm but not a high income and not lots of discretionary spending, I'm going to pay higher proportions of taxes than if Virginia passed, say, more of its sales and income tax receipts down to the local governments to help pay for such things as schools, allowing local governments to rely less on the property tax to pay for such things.

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Arlington, Va.: Is there any reason to believe these assessments are not accurate? How exactly are the assessments determined?

Amy Gardner: That is a question for the ages. Most assessors, if they're honest with you, will tell you it's a highly subjective process. I spoke to just about every assessor in NoVa for today's story, and they all made that point. They also all acknowledged that mistakes do get made. If you really think your assessment is wrong, you should appeal it.

The bottom line is that Virginia Code requires assessors to get as close to 100 percent of market value as of January of the year in question as they possibly can. They use recent sales data as their primary guide.

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Northern Virginia: Not all homeowners plan to move and make money on their homes! My elderly parents have lived here for 50 years and never expected their tax bills to cut into their very fixed income so much. There are lots of folks out there who just never counted on bills like these! Lucky in one sense, yes, but that doesn't help a family who values a community they can no longer afford!

Amy Gardner: Very good point.

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Burke, Va.: Part of Fairfax County's problem is it only gets 21cents of every tax dollar it sends to Richmond back. We subsidize the rest of the state. There should a law mandating a 50cent return on the dollar or NOVA secedes from the rest of Virginia.

Amy Gardner: Yeah, that's a longstanding beef in NoVa. This region is the economic engine of the entire state, and for good or ill, that has meant we give more than we get.

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Arlington, Va.: The question was asked: Who doesn't want the value of their property to rise? I'll tell you who, people like me who have no intention of selling! Those with no plans to move don't really gain anything by having property values rise, and certainly not at the ridiculous rate at which they have gone up in recent years. We just get to pay a much bigger tax bill. The one saving grace is that we got in when the market was low, so our mortgage payment isn't through the roof. But folks who really stretched to afford to buy a home are really screwed now.

Amy Gardner: That is a particularly valid point where you are, Arlington, because it is not growing like Loudoun. Which makes one wonder why its spending is also rising as quickly as the fast-growing localities. Disclosure: I'm an Arlington homeowner. I feel your pain.

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West Bath, Maine: Owning a house that has a rapidly rising tax valuation does not make one rich. Only if and when a house is sold and a gain is realized does one actually receive financial benefit...maybe (if you don't have to buy another equally priced house.) It is wrong to base taxes on this hypothetical valuation therefore. Taxes should, instead, be based on value at the time of property transfer only, as it is done in many states.

Amy Gardner: It's a policy matter that's set by state legislatures. In Virginia, state code requires local governments to set assessments at 100 percent of market value as of January of each year.

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D.C. burbs: Property tax bills are generally sent out twice a year. If they were sent out monthly, they would probably average out to be less than a person's cable bill

WHO HAS a cable bill of $400 a month??????????

Amy Gardner: I think the writer may have been referring to the increase, not the whole bill. If your bill is going from $4,000 to $4,500, that's about a cable bill's worth, right? Another note: It is true that most of us don't notice our tax bills so much because we pay them with our mortgage.

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Falls Church, Va.: To the Alexandria post at top: why would I want to be taxed harder to provide you with affordable housing if it's not affordable for me, in the first place? We can't all see into the future; certainly, I didn't expect my assessment to rise to 550K from the 150K when we got our house in '91. Why should I sell? Doesn't that defeat the purpose of your gripe--not being able to live where you work?

Amy Gardner: Interesting point.

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Springfield, Va.: It is time for Fairfax County Residents to get out their pitchforks and torches regarding the real property taxes. It is just not appropriate for the county to get a windfall just because property values go up! Their costs do not go up simply because home values increase! What do they need? More employees to count all the money?Shouldn't we be thinking of firing them if they use rising valuations to rip off the taxpayers?!!!

Amy Gardner: You definitely have a say. Only 40 people showed up at one of the Board of Supervisors' public hearings last week in Loudoun County. Less than 20 percent of voters turned out for a special election for a state Senate seat. If people think their elected officials are spending too much, too little, doing things wrong, they need to get out and be heard.

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Washington, D.C.: For West Bath, Maine, when housing prices are rising in double digits each year, outpacing inflation AND salaries in the area, ok fine, base the assessments on what people actually paid for their homes, but then have a state-wide capital gains tax (extra tax) on all money made on top of what you originally paid for your house without a whole bunch of loopholes for expenses. There are people turning their homes over for 10 - 15 times what they originally paid in this area and they have been doing that for the last 3-5 years.

Amy Gardner: And that flipping is helping drive values up. The reality is local governments have been relying heavily on value increases to fund their expenses. When values level off, it's going to be interesting to see what happens. Will they do more to keep spending in check? Or will they just start hiking the tax rate back up?

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Arlington, Va.: I have to say that I wish your coverage of the real property tax issue was more insightful. As posters have pointed out, Virginia assessments are required by law to reflect market value -- that's not something the -government- does to you, it's something the -market- does to you. The government simply reports to you the result.

The thing the local government does is decide what percentage of the value will be taken in taxes. So posters are correct in saying that local governments can essentially eliminate any actual tax increase by lowering the tax -rate- by the same amount as the assessment increase.

Where The Post's analysis falls short, however, is in explaining the effect of commercial property tax rates. Virginia law forbids localities from charging a different rate for commercial property than residential property. Also, commercial property values are calculated on a different basis (rents) than residential property values (re-sale value).

This means that the -biggest- factor in rising residential property tax -bills- (not assessments or rates) is the decline in commercial property values relative to residential property values.

In other words, tax bills are rising because commercial properties are paying less of the overall tax burden.

Amy Gardner: Very interesting point. And you're right, I didn't address the issue of commercial property values. It's a worthwhile point of exploration.

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Bowie, Md.: Dear Amy,

Why is everyone complaining?

The assessed value on my house in Bowie went up 40 percent last year. I am as happy as a lark. Now I can ask for an increase in my home equity line of credit!

Amy Gardner: Glad it's working out for you!

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Chantilly, Va.: Amy: We live in Loudoun Co. Our assessment went up about 47 percent. We figured that was because they had corrected errors in the previous assessment that we thought were the reasons why our assessment for the past couple of years was too low, but I checked the assessment details on line and the errors are still there.

So, I have to keep my mouth shut or our assessment could be even higher.

Do you hear of a lot of cases in which the assessment details are simply wrong, resulting in assessments that are too low (and thereby depriving the county of revenue)?

Amy Gardner: I do not -- but I suspect it's hard for the county to know about the errors if they're not pointed out to them. 47 percent sounds awfully high, though I have heard of a few in Loudoun in the 40s. One thing that's different this year is a new assessor. His name is Todd Kaufman and he's probably bringing some different methodology to the mix that may explain why the math is a little different this year.

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Washington, D.C.: Less than someone's cable bill!?! I sincerely doubt that, considering my tax this year will be seven thousand dollars because my house has apparently appreciated 66% over last year. That would be one heck of a cable bill!

Amy Gardner: 10,000 channels and still, nothing on...

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Gaithersburg, Md.: If property taxes go up 40 percent, are we really getting 40 percent more service from the State? I don't think so.

Amy Gardner: Another great, albeit subjective, question. Remember it's the locality, not the state, that collects property taxes. In Loudoun, about 70 percent of it goes to schools. It's hard to argue that Loudoun's school expenses aren't going up. The county will open seven new schools next year to accommodate growing enrollment.

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Lake Barcroft, Va.: You say "If folks really want the rate to be lowered enough to fully equalize the tax bill, then they'll have to ask their boards of supervisors or town councils to make some tough choices about spending. Something's got to give..." In Virginia that is not the only solution. Something like only 14 cents of every tax dollar generated in NOVA gets returned by Richmond. Real Estate taxes could be slashed if the state was more equitable with taxes.

Amy Gardner: Yes, good point. That matter, of course, would require storming the General Assembly, not the Board of Supervisors.

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Loudoun County, Va.: I'm afraid that these increases are going to lead to political warfare between those younger homeowners of childbearing age and those of us who are past that age. The seemingly unending stream of new schools being built here in Loudoun is providing a clear benefit to one set of citizens, but it's a tough sell to those of us who are "boomers" and older.

Amy Gardner: You are definitely paying for the next generation's education, there's no question. Loudoun if fulfilling a huge service need in NoVa. Arlington, in contrast, is experiencing a decline in school enrollment and an aging of its residents' average age.

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Lovettsville, Va.: We purchased our home brand new in October 2005 - we, of course, had an appraisal done for our loan. The appraisal is $75000 Lower than our assessment. Our appraisal was calculated by using property comparisons in our area - how is the assessment calculated?

Amy Gardner: It's supposed to be the same way. You should ask the assessor's office for the documentation.

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North Springfield, Va.: I feel like I'm being priced out of my home with rising assessment value and property tax. But where am I gonna go? If I sell, I'll have to buy another house to live. I wouldn't gain anything. If this continue, I may just have to sell my home and go rent but I don't really want to do this.

Amy Gardner: This is what's forcing some to consider West Virginia. For good or ill, the demand is there. As the Arlington assessor said in today's story, so long as the demand remains, the prices will continue to rise.

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Missing, Pa.: In my hometown in PA assessments are done only once every blue moon. The town next to ours just recently had an assessment because their last one was from 1979!

Why are assessments so often here? Even small towns like in PA have needs for more roads, schools, etc...

What makes this area so different?

Amy Gardner: Yes, in North Carolina, where I lived until last year, assessments are done once a decade. Ultimately, though -- and several of you have made the point -- it's not the assessment that determines your bill. It's the rate. Even if average assessments were only $100k in Loudoun, the supervisors would be under great pressure to raise revenue for pay for all the services residents demand.

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Kingstowne, Va.: I live in Fairfax County and my assessment has gone from $214K in 2001 to $512K this year, and it's arguably UNDER-assessed based on current sale prices. But I'm not going to complain too much. In the scheme of taxes, I would rather have to pay the real estate tax than a higher sales tax or a higher gas tax. Why? The real estate tax is deductible on your federal income tax return (unless you get hit by the AMT). The other two taxes I mentioned are not. I figure that they're going to sock you for a tax somewhere, right? If so, it might as well be something deductible.

Amy Gardner: It just depends on where your wealth is and how you spend your money. Most tax experts say a balance between those three sources of income is the most equitable way to collect revenue for states and local governments.

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Inside the Beltway: Frankly, I'm glad that I'm not "getting back" all of the revenue I send to Richmond. Please keep those prisons, mental hospitals, etc. downstate.

Amy Gardner: Hmmm...but there's also state aid for education and of course road money, too, right?

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Northern Virginia taxpayer; service recipient: Before people go with pitchforks about the tax rate, I would encourage them to look at their local government's budget and identify the specific items they would like to cut. Because localities do not have the power to raise other revenue -- so it can only happen by cutting something.

And don't just say "waste, fraud and abuse", because that's not a line-item they can vote on. The budgets are the Web, people -- identify what you don't want to pay for, specifically.

Amy Gardner: And don't forget that localities are about to feel the pinch with car tax receipts, too. Last year car tax relief was frozen by Richmond lawmakers at 70 percent of your bill, but the dollar amount was frozen too. So local governments that are growing (like Loudoun) will receive a diminishing amount of revenue from Richmond relative to what car owners owe.

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Ashburn, Va.: I was stunned with my tax assessment this year. Up $100k from last year, for a small townhouse in Ashburn. Interestingly, my neighbors, with the exact same layout, number of bathrooms, etc. have different assessment values. How can that be? I understand end unit vs. middle units, but the difference between mine and my next door neighbor is $17k, both middle units.

Amy Gardner: Sounds like a worthwhile appeal. Get the data from the assessor's office.

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Alexandria, Va.: Where'd the money go? If my assessment is up 20 percent and they don't cut the tax rate - countywide - this is millions of dollars. Where does that money go?

Amy Gardner: Ask your city council member. Teacher salary increases? Extra police officers? Road construction? Any number of possibilities.

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RE: Boomers: "... it's a tough sell to those of us who are "boomers" and older."

Oh please - us young families with children are paying for the boomers Social Security, which we are paying in to and will see little of. So, you boomers should gladly help to foot the bill of my children's education. Plus, you get the benefits to society that having well-educated children brings.

Amy Gardner: It all depends on your perspective, right?

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Rosslyn, Va.: I just got 2006 assessments on two condos in my building. One (one bedroom)I sold the middle of Feb (on the market 10 days), and the other (two bedroom)I settled on in Jan. The assessment on the smaller one was, I think, too high. The market has cooled a bit and I sold for about $50K less than the assessment. The assessment on the larger one was $30K lower than I paid, but that condo is worth about $150K more than I paid for it (very happy about that!). I guess it just goes to show that assessments are not an exact science.

Amy Gardner: Indeed. And the assessors will tell you that, too.

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Fort Washington, Md.: Now, everyone realizes that development ends up costing the homeowners the most and their local governments. House builders convince local government that development is good. Who is left to pay for the roads, schools, rec centers, library, sewer and water? Our society of bigger is better is costing us both our legs. Is it almost too late to use the word "smart growth'?

Amy Gardner: This is another side to the debate. Most rising costs of government are a result of growth. And you, the residents of these communities we're talking about, have somewhat of a say about whether you want to control that growth.

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Washington, D.C.: Isn't there tax relief for the poor? My relatives, all 4 of them, own houses that have been accessed at over $900G's even though they bought at around $500G's in fairfax and vienna. They managed to buy those homes based on selling their DC homes at ridiculous prices, but these relatives are very low income.

Amy Gardner: There are programs to assist lower-income homeowners with tax relief. You should contact your local government to find out more.

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Alexandria, Va.: If you're house is assessed at, say $500k, but then, after 3 months on the market, you are only able to sell it for, say $450k. Do you get to appeal the difference in your tax bill?

Amy Gardner: You certainly have the right to appeal. But "market value" is not the same as the price your house sells for, I'm told. You might have paid too much, or too little, for example. So while your sale price is an important consideration, it's not the only one.

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Alexandria, Va.: For the poster concerned about elderly parents in NoVa, local governments provide very generous tax relief for low and moderate income elderly and disabled residents. Check with your local government for details.

Amy Gardner: Yes, just to reiterate. Anyone else with more specifics, please post and I'll pass it along.

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Vienna, Va.: I am most unhappy with the breakdown of the assessment. My two story split-foyer 1960's home with a decaying exterior is now worth 450K while my 1 acres of land right outside Tysons Corner is 300K. Obviously my property is valuable because of the land. If I were to ever sell (my kids say they won't let me) the buyer would rip it down for sure.

Amy Gardner: It sounds like you think the building is overvalued. Have you appealed?

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washingtonpost.com: This concludes today's discussion with Amy Gardner. Thank you for your questions.

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