Group to Consider Changes to County’s Tax Relief Program for Seniors

In 2015, 940 Arlington households took advantage of a tax relief program for seniors, thus avoiding $4.2 million in real estate taxes.

A new working group appointed by the County Manager will be conducting a “comprehensive review” of that program.

The program is currently offered to homeowners age 65 or older, with an annual income of up to $99,472 and household assets (excluding the home itself) up to $340,000. Depending on the income level and assets, the homeowners may qualify for a full or partial exemption. A deferral of taxes until the home changes ownership is available for any portion that’s not exempt.

The County Board included funds in the latest county budget for a review of the program.

“In conducting research for the [Affordable Housing Master Plan], the County found that many low-income senior households on fixed incomes face financial stress related to increasing condominium fee and real estate tax burdens,” said the new Real Estate Tax Relief Working Group charge. “The AHMP’s accompanying Implementation Framework included a recommendation to review the goals and guidelines of the RETR Program, and to consider redefinition of income levels, asset levels, and criteria for exemptions and deferrals.”

In the recent Arlington County Board primary, Board Chair Libby Garvey was criticized by Democratic challenger Erik Gutshall for supposedly “threatening the ability of our most vulnerable seniors to live in Arlington.”

Garvey explained that she wants to lower the eligibility barriers for the tax deferral program. She hinted, however, that the full tax exemption might be under additional scrutiny, as it can “provide quite a windfall” to a homeowner’s heirs once the home is sold.

The working group is tasked with presenting its final recommendations this winter, ahead of the Fiscal Year 2018 budget process.

The full county press release, after the jump.

Arlington County Manager Mark Schwartz reported today to the County Board on the official charge for a Real Estate Tax Relief Working Group that will perform a comprehensive review of the County’s program.

“We all acknowledge that Arlington’s rising property values and related increase in the property tax burden is sometimes difficult for seniors on a fixed-income to deal with,” Schwartz said. “This working group will be taking a hard look at our current program and present recommendations early next year on what, if any, changes should be made to better achieve our goal of supporting residents, where we can, who wish to age in place.”

The working group, which will be appointed by the County Manager this month and report to him on its findings, is charged with:

• Researching and reviewing best practices across the nation related to real estate tax relief.
  Engaging and informing the community and relevant stakeholders of the group’s ongoing efforts and discussions.
• Determining if there may be Arlingtonians who qualify for real estate tax relief but are not currently participating in the program, and providing recommendations for what could be done differently to effectively reach these residents.
• Collaborating with a consultant to conduct surveys and/or focus groups to gauge the program’s historical success in reaching eligible Arlingtonians and enabling these residents to stay in their homes, and to ascertain what changes (if any) would allow the program to better address elderly and disabled Arlingtonians’ needs.
• Using identified best practices and survey/focus group results to inform an analysis of the current program’s approach to enabling elderly and disabled Arlingtonians to stay in their homes.
• Providing recommendations on how to best structure and administer the program in Arlington moving forward.

Read the charge to the working group, which includes timeline and proposed members.

In Fiscal Year 2015, 911 households received a full or partial exemption and 29 households received only deferrals, resulting in a combined $4.2 million in uncollected revenue.

The County reviews criteria for the Tax Relief Program annually as part of the County budget process. The working group will conduct a broader review involving the community. One of the key recommendations of the Affordable Housing Master Plan adopted by the County Board in September 2015 was to review the goals and guidelines of the program, and to consider redefinition of income levels, asset levels and criteria for exemptions and deferrals.

Virginia localities are authorized to provide real estate tax relief to homeowners aged 65 or over, as well as to permanently disabled homeowners.

• The current Arlington County Tax Relief Program provides an exemption or deferral from real estate taxes for qualified Arlington homeowners whose annual household income is below $99,472, and whose household assets (excluding the value of their Arlington home) are below $340,000.
• A household may receive a full, 50 percent or 25 percent exemption depending on income, assets and household size. For households receiving a partial exemption, the non-exempt portion of the tax may be deferred.
• Homeowners within the income guidelines who have assets over $340,000 but below $540,000 may defer payment of their real estate taxes until their property changes ownership.
• No interest or penalty fees are charged.

The County Manager will appoint a limited-term advisory body, the Real Estate Tax Relief Working Group, which will consist of a chair and vice-chair, along with members representing the following:

• Commission on Aging
• Disability Advisory Commission
• Fiscal Affairs Advisory Commission
• Housing Commission
• Member(s)-at-large
• Real Estate Tax Relief Program participant(s)

The working group will produce a final report on its key findings in early 2017. The report could include recommendations for eligibility, structural, administrative and other changes to the existing program.