Twice as nice: Henrico plans to offer 2-cent tax credit for second straight year

For the second year in a row, Henrico County officials are planning to provide a real estate tax credit to property owners in the county – and additional help could be on the way, too.

On Tuesday, County Manager John Vithoulkas announced that his proposed Fiscal Year 2023-24 budget would include a tax credit of two cents per $100 of assessed value, matching the credit that the county issued last year. Last year, that amount totaled about $10 million; this year, it would result in about $11.2 million being returned to property owners.

The proposal means that the owner of a home valued at $367,000 (the median home value in Henrico) would receive a credit of $73.40, according to Henrico Finance Director Sheila Minor, while the owner of a $150,000 home would receive $30. All property owners who are due to receive $30 or more in tax credits would receive checks in September, she said. Those who are due less than that amount would see the credit applied to their second-half property tax bills in October, while those whose property taxes are delinquent would see the credit applied to their outstanding balance.

The move is contingent upon approval by the Henrico Board of Supervisors in June, a mere formality.

“Today we’re announcing a proposal that I believe further demonstrates that Henrico is a county with a heart,” County Manager John Vithoulkas said Tuesday, against the Valentine’s Day backdrop of a “LOVE” sculpture and assorted red heart-shaped balloons at The Cultural Arts Center at Glen Allen. The proposal “shows that this board of supervisors recognizes the economic challenges our homeowners, families and taxpayers are facing each day,” he said.

Last year, Henrico became the first locality in Virginia ever to provide a real estate tax credit to property owners when it issued a two-cent rebate, effectively forgoing about $10 million in revenue.

Though this year’s move would cost the county some tax revenue, it still stands to see a significant increase anyway as the result of higher assessments. The median value of a single-family home in Henrico increased by nearly 14% from last year to this year, according to county data, meaning that even with the two-cent tax credit, a homeowner in that scenario would pay about $307 more in taxes this year than last year.

But that amount still could drop a bit further. During Tuesday’s press conference to announce the proposal, Three Chopt District Supervisor Tommy Branin hinted at the possibility of more tax relief.

“A tax credit of two cents per $100 is great,” he said. “But let’s start to think. . . that we start a discussion. We can do more tax relief. If we do more, what would it be like? What would be the impacts to our programs, to our services, and to our hard-working employees? This board and our staff are not afraid to work hard. We do it every day. So I’d like to challenge and see what we can do in the near future, and I am sure . . . there is more to come.”

One possible scenario for additional relief would be another drop in the county’s real estate tax rate, which supervisors last year lowered to 85 cents per $100 of assessed value, as part of what Vithoulkas termed at the time a “2+2” plan (lowering the tax by two cents and providing a two-cent tax credit).

Even with those moves last year, which amounted to the county forgoing about $20 million in potential tax revenue, most property owners still saw their overall property tax bills increase (by about $146 for the owner of a home valued at $322,000, for example) because of the rising assessments.

In May, after vehicle owners were struck with much higher than anticipated personal property tax bills, officials also reimbursed vehicle owners a total of about $20.4 million, after many received much higher-than-anticipated bills last spring.