AGENDA DATE: 11/20/2024
TITLE:
Title
Schedule a Public Hearing to Consider Adoption of an Ordinance to Modify Real Estate Tax Relief for Elderly and Disabled Persons
BODY
SUBJECT/PROPOSAL/REQUEST: Schedule a Public Hearing to Consider Adoption of an Ordinance to amend County Code Chapter 15, Taxation, Article 7, Real Property Tax, by modifying the criteria for Real Estate Tax Relief for Elderly and Disabled Persons
ITEM TYPE: Regular Action Item
STAFF CONTACT(S): Richardson, Herrick, Bessette, Sumner, Usher, Bowman, Matheny, Wilson, Lane
PRESENTER (S): Jennifer Matheny
LEGAL REVIEW: Yes
REVIEWED BY: Jeffrey B. Richardson
BACKGROUND: In the FY 24 and FY 25 budget development processes, the Board of Supervisors indicated support for broadening the eligibility for real property tax relief through the current program for Real Estate Tax Relief for Elderly and Disabled Persons. For tax year 2024, the Board voted to modify the qualifying criteria to increase the income and net worth limits. The current eligibility criteria for the program are as follows:
- Applicant is at least 65 or applicant has been medically determined to be totally and permanently disabled as of December 31st of the prior year;
- Applicant is the Title Holder of the property as of January 1 of the current year;
- Applicant’s Combined Total Income, for last year, from all sources does not exceed $88,800;
- Applicant’s Total Net Worth, including spouse, co-owner(s), and their spouse(s) as of December 31st of the prior year, does not exceed $305,000;
- Applicant’s Real Estate Property seeking tax relief may not be used in a business.
Staff is requesting the Board consider modifying the program criteria for tax year 2025 prior to the applications and program information being distributed in January. This will simplify the application process and avoid changes later in the tax year after approvals have been issued. Based on the application cycle for existing participants in the program undergoing the three-year review, tax year 2025 will generate a larger three-year review than other years with over 500 full applications to be processed in addition to recertifications.
STRATEGIC PLAN: Mission - To enhance the well-being and quality of life for all community members through the provision of the of the highest level of public service consistent with the prudent use of public funds.
DISCUSSION: Data about the program is available in Attachment A, 2024 Real Estate Tax Relief for the Elderly and Disabled Program Demographics. Among the data included:
- The change in 2024 increased the number of households in the program;
- The total dollar amount of tax relief increased by approximately $160,000;
- 73.50% of the applicants received 100% tax relief;
- The average income of the applicants in the program for tax year 2024 is $33,350 with an average net worth of $54,508.
This data suggests that the program is working to support the community’s most vulnerable residents, with the majority of the recipients receiving full relief and the average income and net worth limits well within the eligibility thresholds.
For Tax Year 2025, staff recommends:
- As was done in 2023 and 2024, continuing to increase the income limit to align to the current value for the US Department of Housing & Urban Development Area Median Income (AMI) Limits, using the value for 80% AMI for a family of four in Albemarle County;
- As was done in 2024, continuing to increase the net combined financial worth limit. In 2024, this limit was adjusted to reflect the change in inflation for the value of $200,000 in 2007 to 2024, as the net worth limit had not been adjusted during that time period. 2025 is recommended to be another inflationary adjustment.
Under Virginia Code § 58.1-3210, the County has authority to modify the qualifying criteria. Albemarle County Code Chapter 15, Article 7, Division 2, Real Property Tax Exemption for Certain Elderly and Disabled Persons, describes the County’s real property tax relief program for elderly and disabled persons.
The proposed ordinance (Attachment B) would modify the current program criteria with the following:
1. Increase the net income limit from $88,800 to $97,650;
2. Increase the net financial worth limit from $305,000 to $312,000;
3. Modify the three relief percentage brackets from $0 to $48,825 for 100% relief, $48,826 to $73,238 for 75% relief, and $73,239 to $97,650 for 50% relief.
The change would be effective for Tax Year 2025, which begins on January 1, 2025.
BUDGET IMPACT: The proposed modification to the Real Estate Tax Relief for Elderly and Disabled Persons program would decrease collectible tax revenues. For FY 26, the budgetary impact of increasing the income and net worth limits is estimated to be $120,000. If the ordinance approved after the scheduled public hearing, this action would be reflected in the County Executive’s Recommended Budget scheduled to be presented on February 26, 2025.
RECOMMENDATION:
Recommendation
Staff recommends that the Board schedule a public hearing to consider the adoption the attached proposed ordinance (Attachment B).
ATTACHMENTS:
A - 2024 Real Estate Tax Relief for the Elderly and Disabled Program Demographics
B - Real Estate Tax Relief for the Elderly and Disabled Proposed Ordinance