Many Richmond residents will again see a bigger tax bill next year, as property tax assessments on properties have risen an average of 13% this year.
City assessor Richie McKeithen said the increase in estimated land values is due to a strong real estate market and limited housing supply.
“I think that says a lot that the city of Richmond is very marketable, very livable for a lot of people, especially those who come from outside,” he said. “We’ll see how long this continues.”
Appraisals, under state law, are intended to match the projected market rate for a given property. In the City of Richmond, homeowners pay a rate of $1.20 per $100 of assessed value. With a 13% increase, an owner of a single-family home valued at $300,000 this year would pay about $468 more when their tax bill is due next year.
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While higher assessments are especially good for city coffers and homeowners who are building equity, higher taxes can become a burden for those with below-average salaries or fixed incomes.
“You’re driving us out of our homes,” 8th District councilwoman Reva Trammell said of the assessments. “We can’t afford these valuations that keep skyrocketing year after year.”
Some of the largest percentage increases in assessments were concentrated in neighborhoods on the north side and east end of the city. But the biggest increase in values has been concentrated in the wealthier parts of the city’s West End. Several neighborhoods south of the James River also saw significant increases again.
McKeithen said the growth is happening across the city. He attributed the trends in part to more residents becoming interested in owning a home as rental costs also rise.
“Interest rates have been very attractive to people who were in the market to buy homes,” he said. “You cannot underestimate the state of the rental market and its effect on the single-family home market. Until recent months, and perhaps even now, it was cheaper to buy a house than to rent a flat. “
He said supply and demand, as well as the rising cost of building materials and inflation, also impact property assessments.
Decline in the number of real estate advertisements
The number of new single-family home listings in the Richmond metro area fell about 11% in the first three months of 2022 compared to 2021, while the average sale price of a single-family home jumped more by 11% to reach $397,000 in the same period, according to the Richmond Association of Realtors.
This data does not include townhouses or condominiums. New listings for these home types fell 26% in the first three months of 2022 compared to the same period last year, while the average sale price rose nearly 17% to almost $338,000.
Laura Lafayette, CEO of the Richmond Association of Realtors, said the valuations also reflect new construction and redevelopment underway or about to begin soon in areas such as Manchester and Creighton.
“If you are on a fixed income or only have a modest income, an increase of $200 to $300 on your bill will have a substantial impact the month you have to pay these taxes,” she said. . “The increase in value may be greatest in certain affluent neighborhoods… But the economic impact is greater in neighborhoods where citizens have modest household incomes.”
Trammell said she is preparing to introduce legislation to reduce the city’s property tax rate by 4 cents to offset the growing tax burden on property owners. She said she doesn’t know if it will pass, especially after city officials and some council members last year were reluctant to back her proposal to cut it by 6.5 cents.
Tax Relief Options Available
Richmond Mayor Levar Stoney’s administration opposed the tax cut, but earlier this year offered a 2-cent cut if voters approve the One Casino and Resort plans.
While the city had planned to hold another referendum on the matter in November after the ballot measure failed last year, officials halted it due to state legislation prohibiting another vote. at the Richmond Casino until 2023.
Jim Nolan, the mayor’s spokesman, said on Thursday that Stoney still supported granting the tax cut if the ballot measure passed next year, but said it was too early to talk about measures tax relief for the next property tax billing cycle.
“The mayor has always advocated for economic growth and development projects that broaden the city’s tax base to reduce the tax burden on city property owners,” Nolan said. “The administration encourages residents who qualify to take advantage of city programs that provide tax relief to homeowners.”
City residents who are disabled or age 65 or older, who earned less than $60,000 in the previous tax year, and who have less than $350,000 in assets can apply for tax relief in the city. The program offers either a full waiver or a partial exemption on the applicant’s tax bill, depending on income.
As some city officials consider reducing the property tax rate, Lafayette said cutting it by just pennies would provide limited relief and make it harder for the city to invest in capital projects and services. public such as public transport.
Instead, she said it would be helpful for city leaders to advocate for state legislation that would allow localities to enact new tax relief measures, such as rebates for residents of under 65 but living in the same home for a long time.
“Now is the time for Richmond to really consider seeking this relief for its citizens,” she said.