How the Housing Boom Affects Virginia's Real Estate Tax

In this edition of the Virginia News Letter, John Knapp analyzes the impact of the housing boom on real property tax assessments and tax bills in Virginia. He points out that while Virginia local governments have taken advantage of the housing boom to increase tax collections, they theoretically did not have to set rates that would yield large gains in revenue. They could have adjusted their rates downward so that tax collections would not grow rapidly. Though many cut their rates, because of the inflation of residential values tax levies grew strongly even with lower nominal tax rates. Knapp reviews the importance of the real property tax in Virginia, then describes the various types of tax relief programs and restraints on property tax growth now being considered in Virginia. He analyzes the proposed Constitutional amendments with the intent of slowing property tax growth that both major party candidates in the gubernatorial campaign, Timothy M. Kaine and Jerry W. Kilgore, have proposed, evaluates the proposals, and discusses an alternative form of relief.