This year’s housing market shows little sign of slowing down, as overall Arlington County real estate assessments are set to rise by 19.4 percent.
Though the increase will not be as severe as it was last year, when it increased by 24 percent, this is the sixth straight year of double digit growth.
County officials are considering cutting the real estate tax, which they slashed by eight cents per $100 of assessed value last year. Even with a decrease in the rate, Arlington residents will likely pay more in taxes this year.
“We’re looking at ways to lower the tax rate and remove the burden on homeowners,” County Board Chairman Chris Zimmerman said at a meeting of the Arlington County Civic Federation. “But this is the nature of the market in Arlington.”
The average single-family dwelling increased in value by 18.25 percent, to $541,800. Residential condominiums rose in value by 19 percent to $367,000, though that is a much smaller growth than last year’s 32 percent increase.
Commercial property, including hotels, retail and office buildings,
experienced its largest growth in 16 years, at 14.8 percent. This compares to 7 percent in 2004.
Virginia mandates a single tax rate for commercial and residential properties, so the strong real estate markets has “led to greater and greater financial burdens” for homeowners, a recent report by County Manager Ron Carlee stated.
The County Board will set the real estate tax rate in April. Property tax payments will be due in two installments on June 15 and October 5.
COUNTY OFFICIALS are hoping the General Assembly will grant localities the authority to enact a homestead exemption.
Last year Del. Bob Brink(D-48) shepherded a constitutional amendment that would have exempted up to $100,000 of the value of residents’ homes from taxation through the House of Delegates. A similar amendment was killed in the state Senate.
Gov. Timothy Kaine is promoting a measure that would make the first 20 percent of the value of one’s home free from taxation, a proposal Brink is now backing.
Two separate sessions of the General Assembly would have to approve it, with an election in between, before the amendment goes to a voter referendum. Brink is not sure if it will have the votes necessary to pass the General Assembly.
“It’s going to be a tough sell,” he said. “We need to flesh it out and work to advance it.”
Even if the measure does pass, voters would not get a say until November 2008. Because of this, Kaine said in a conference call with reporters last week he would wait until next year to bring it before the General Assembly. This year the governor is seeking a statutory change that will provide residents with more information about real estate assessments and tax rates.
Some officials have cautioned that a home owner tax exemption could hurt local governments, which depend on real estate taxes as their main source of revenue.
“Localities have a real problem because there are so few sources of revenue,” said Sen. Mary Margaret Whipple (D-31), who supports the measure and introduced it in the Senate last year. “Localities would choose whether or not to provide it and at what level.”
THE COUNTY RUNS several programs to help mitigate the tax burden on residents. The Real Estate Tax Relief program reduces property taxes for those 65 and older, and disabled adults, who own a single home and have a combined income of less than $72,000. If the homeowners have less than $240,000 in assets they are eligible for a property tax exemption, and if less than $350,000 for a deferral.
Zimmerman and County Board member Paul Ferguson have both advocated increasing the income and asset levels for elderly residents.
“I’d like to do more to help retirees, who have saved all their lives, pay their taxes,” Ferguson said.
The application deadline to apply and receive a timely adjusted bill is March 15, 2006. The final deadline to apply is August 15, 2006.
Last year the Arlington County Board approved the Homeowner's Grant Program to provide relief for low and moderate income residents. It offers a $500 grant to homeowners who earn below $72,000 and have less than $240,000 in assets.
More than 2,000 county homeowners applied for the grant, after the deadline was extended from September 2005 to the end of the year.