In response to a comment on Facebook by one of WW’s readers, this post provides information on certain personal property and real estate taxes on businesses in the City of Winchester. Should any information appear inaccurate or outdated, please do not hesitate to leave a comment addressing the problem.
History of real property tax increases since recession began
- At a city council meeting on April 8, 2008, citizens accused the city of inflating property value assessments in order to bring in more tax revenue during 2007. One person asked if he was entitled to a refund for that. With only one council member voting no and another absent from the meeting, the city council, including Art Major and Jeff Buettner, voted to increase the real property tax rate from $0.65 to $0.68 per $100 assessed value.
- In a special session on April 21, 2009, the city council unanimously approved raising the tax rate from $0.68 to $0.77 per $100 assessed value.
- And on April 12, 2011, the city council (with Mr. Hill and Mr. Veach absent) voted to increase the rate again from $0.77 to $0.86 per $100 assessed value.
- Since spring 2008, city council has voted to increase the real property tax rate $0.21 or 32.3%.
In February of this year, the Winchester Star covered the latest proposed tax increase and reported:
The city completed a biennial mass reassessment of real estate in 2010. That process determined that the total value of taxable real estate in Winchester had dropped by more than $341 million, or 11 percent.
Update: During the housing boom, the local government got used to the nice tax revenues thanks to the artificially-inflated housing market values. Yes, some folks had to sell their properties because they couldn’t afford the property tax payments. When the housing bubble popped, housing values plummeted and the local government’s cash cow became an emaciated mess. It is no mystery why tax rates have increased on property owners: the local government hates having to tighten its belt. So, that means no break for homeowners. Sorry, folks.
How Winchester property tax rates compare to other Virginia cities, FY 2010-2011
For the purposes of this article, nominal real estate tax rates are listed but many localities do not assess the property at 100% of fair market value, such as the City of Bedford (84.7%), thereby causing effective tax rates to be significantly lower. The City of Winchester, however, does assess real property at 100%.
“Personal property” represents nominal tax rates on light cars and trucks. The assessment ratio is typically 100%, such as in Winchester, but cities vary in their assessment ratios and in how they calculate value: average trade-in, average loan, average retail, or some other method. Therefore, nominal rates can vary greatly from effective rates, but due to the way effective rates are calculated, it is difficult to compare them between cities.
Winchester
Real estate is $0.77 (Recently raised to $0.86)
Personal property is $4.50
Alexandria
Real estate is $0.98
Personal property is $4.75Bedford
Real estate is $0.86
Personal property is $2.35Bristol
Real estate is $0.94
Personal property is $7.00 (Assessment ratio is 30%.)Buena Vista
Real estate is $0.90
Personal property is $5.85 (Assessment ratio is 80%.)Charlottesville
Real estate is $0.95
Personal property is $4.20Chesapeake
Real estate is $1.04
Personal property is $4.00Colonial Heights
Real estate is $1.10
Personal property is $3.50Covington
Real estate is $0.66
Personal property is $5.60 (Assessment ratio is 55%.)Danville
Real estate is $0.73
Personal property is $3.00Emporia
Real estate is $0.81
Personal property is $5.00Fairfax
Real estate is $0.96
Personal property is $4.15Falls Church
Real estate is $1.24
Personal property is $4.71Franklin
Real estate is $0.77
Personal property is $4.50Fredericksburg
Real estate is $0.68
Personal property is $2.99 (Assessment ratio of 90%)Galax
Real estate is $0.57
Personal property is $1.68Hampton
Real estate is $1.04
Personal property is $4.25Harrisonburg
Real estate is $0.59
Personal property is $3.00Hopewell
Real estate is $0.99
Personal property is $3.50Lexington
Real estate is $0.70 (recently raised to $0.73)
Personal property is $4.25Lynchburg
Real estate is $1.05
Personal property is $3.80Manassas
Real estate is $1.32
Personal property is $3.25Manassas Park
Real estate is $1.65
Personal property is $3.50Martinsville
Real estate is $1.02
Personal property is $2.30Newport News
Real estate is $1.10
Personal property is $4.25Norfolk
Real estate is $1.11
Personal property is $4.25Norton
Real estate is $0.80
Personal property is $1.85Petersburg
Real estate is $1.35
Personal property is $4.40Poquoson
Real estate is $0.81
Personal property is $4.15Portsmouth
Real estate is $1.24
Personal property is $5.00Radford
Real estate is $0.76
Personal property is $2.44Richmond
Real estate is $1.20
Personal property is $3.70Roanoke
Real estate is $1.19
Personal property is $3.45Salem
Real estate is $1.18
Personal property is $3.20Staunton
Real estate is $0.90
Personal property is $2.00 (It appears that the city recently raised it to $2.40)Suffolk
Real estate is $0.91
Personal property is $4.25Virginia Beach
Real estate is $0.89
Personal property is $3.70Waynesboro
Real estate is $0.70 (Recently raised to $0.75)
Personal property is $5.00 (Assessment ratio is 50%)Williamsburg
Real estate is $0.54
Personal property is $3.50
Assuming my math is correct, the range of nominal real estate property tax rates for FY 2010-2011 was $0.57 to $1.65, and the median nominal real estate property tax rate was $0.95. Winchester’s nominal rate that fiscal year was 18 points lower than the average. The median effective tax rate was $0.91. The effective rate was lower because although property values on average were rising, property assessments in many localities were not being performed as often as necessary to keep up with the changing markets. Winchester’s effective rate that year ($0.77) was 14 points below the average.
The median personal property tax rate on cars and light trucks for cities using a 100% assessment value was $3.66 with a range of $1.68 to $5.00. Winchester’s personal property tax rate of $4.50 is 23% higher than average for the 34 Virginia cities using a 100% assessment value. Most cities (18 out of 39) use the Average Loan to determine taxable value. Ten cities, including Winchester, use the Average Trade-In value: Bedford, Buena Vista, Falls Church, Franklin, Harrisonburg, Lexington, Lynchburg, Manassas, Norton. Four cities use the Average Retail value. Seven cities use some other form of assessment.
The City of Winchester determines Average Trade-In value with the following pricing guides: N.A.D.A. Official Used Car Guide, N.A.D.A. Official Older Used Car Guide, and the Black Book from Hearst Business Media.
Tax rates and information were gleaned from the Virginia Economic Development Partnership’s 2010 – 2011 Virginia Guide to Local Taxes on Businesses.
The Winchester Watchdog 