Higher Home Values = Rising Assessments and Higher Tax Bills in Loudoun

Higher Home Values = Rising Assessments and Higher Tax Bills in Loudoun

While the Loudoun County tax rate may be declining, many homeowners could receive higher real estate property tax bills this spring due to rising assessments.

The value of the county’s taxable real estate climbed 6.6 percent from a year ago to $77.7 billion, Revenue Commissioner Robert Wertz Jr. told the Board of Supervisors on Feb. 6.  That included new construction and lots — the increase was 3.4 percent without those.

Real estate or “real property” in Virginia is assessed at 100 percent of its fair market value. Real property tax bills are based on the assessment and the property tax rate, which is set annually by the Board of Supervisors.

While the average single-family detached home saw its value rise by 2.4 percent, some experienced larger increases. For instance, a 2,750-square-foot home in Ashburn rose by 3.1 percent to $603,820 after a 2.2 percent jump in 2017. The average value of townhomes crept up a little more at almost 4 percent.

Meanwhile, the value of commercial and industrial property rose by 10 percent over 2017 to $15.6 billion, according to county figures. About 18 percent of Loudoun’s real estate is commercial, while two-thirds is considered residential — single-family homes, townhomes and condos.

Another 3 percent is multi-family, which is considered nonresidential since it’s often owned by large companies as a business or investment even though people live there and pay taxes factored into rent. Some 8 percent is tax exempt like churches and public buildings.

While Loudoun has a higher percentage of nonresidential property than some counties such as Fairfax, it ranks behind others like Arlington. Officials have worked for years to increase the share of commercial property since it generally costs less in services than residential property.

If nonresidential assessments represent a low share of a county’s total property base, homeowners “typically need to pay more in property taxes each year just to maintain existing levels of service,” a report by the George Mason University Center for Regional Analysis says. “Jurisdictions that are not able to increase the taxable value of their commercial, multifamily, and industrial land must place a greater burden on homeowners, cut spending on public facilities and services, or do both.”

Loudoun data centers saw a big valuation jump in the past year — 35 percent — to $3.05 billion. Retail, the largest commercial category, increased by 10 percent to $3.5 billion. The third-highest sector, office, nudged up 4 percent to $2.6 billion.

Last year, the Board of Supervisors approved a 2-cent property tax cut to $1.125 per $100 in assessed value to fund the county’s $2.5 billion budget. The rate is still higher than the median real estate figure for Virginia counties of $1.07 per $100.

County Administrator Tim Hemstreet presented on Feb. 14 three scenarios for the fiscal 2019 budget based on an equalized tax rate of $1.09 per $100 of assessed value and rates at $1.10 and $1.08. The equalized rate takes into account average real property assessment increases.

The proposal at the $1.09 rate provides for an increase of $53.5 million to the school district over fiscal 2018. The school district is requesting about $10.8 million more than that and would receive an additional $8.2 million at the $1.10 rate. The difference would widen at the $1.08 level.

The school district gets about two-thirds of its funding from the county, which will consider the increased funding request along with other budget matters. Public hearings on the 2019 budget are slated for Feb. 27 and March 1 and 3. The board plans to adopt a budget by April 3.

Printed notices of new property assessments started being mailed on Feb. 2, while actual bills will be sent later. Assessments can also be checked on the county website. Payments are due June 5 and Dec. 5.

Property owners who believe their assessments are wrong can challenge them by filing an application to review online at www.loudoun.gov/reaa by March 5. Mail-in forms can be obtained at county libraries, community centers and other public buildings. After March 5, appeals can be made to the Board of Equalization.

“We urge people who [challenge assessments] to get their applications in early,” Wertz said.

In another tax matter, businesses have until March 1 to report 2017 gross receipts and pay taxes. Receipts can be reported online at www.loudoun.gov/efile and taxes paid at www.loudoun.gov/PayTaxes.