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'Homestead exemption' bill passes Senate, moves to House
BY ANNE ADAMS • STAFF WRITER
RICHMOND - Legislation dubbed the "homestead exemption," watched closely by officials in Highland County for more than a year, was re-introduced in this session of the General Assembly, and has passed the Senate. It would provide tax relief for certain property owners in Virginia, allows localities to provide tax exemptions by ordinance.
Senate Bill 496 was introduced by Senator Ralph Northam (D-Norfolk). It would give local governments the ability to cut property taxes for residential or farm property by up to 20 percent of assessed value.
"Property owners throughout the commonwealth have been asking for relief and today we took a big step in helping them afford to stay in their homes," Northam said in a statement this week. "This isn't a tax cut for the rich or for corporations. This is a tax cut for working people doing their best to own their own home or farm."
Northam's bill provides the language for the homestead exemption in Virginia law. A resolution to put the amendment to ballot passed through the House of Delegates 96- 0.
Senate Bill 496 now moves on to the House of Delegates for passage.
The bill would affect tax years beginning on or after Jan. 1, 2009. Each governing body (county, city or town) could create an ordinance to exempt, or partially exempt, certain property owners from real property taxes, allow for deferring property taxes, or provide for a combination of exemptions and deferrals.
The exemptions and deferrals would be for up to 20 percent of the assessed value of any single parcel.
Properties that qualify would include residential or farm properties designed for continuous habitation, and that are occupied as of the tax day as the primary dwelling of the owners, who must be individuals. This includes manufactured homes.
A locality's ordinance must include provisions to verify eligibility.
Each governing body would provide annual written notice to the public of any program it establishes.
Any deferred real estate taxes granted by a locality's ordinance would be paid to the locality if a property is sold, or from the estate of the property owner within a year of the death of the owner.
The referendum to allow this amendment would be on the November ballots.
Should this legislation pass, it would still have to survive a statewide referendum.
At that point, if it passes, counties like Bath and Highland would have the option to create such an ordinance. But in Highland, where farmers largely support such a measure in order to reduce their tax burden, county officials would either have to raise property taxes on other landowners or find some other way to make up the difference. Since Highland gets the vast majority of its county revenue from property taxes, officials have said, it cannot afford to simply reduce taxes on farmers unless it increases taxes somewhere else.
There is no state revenue impact associated with the bill.
Currently, property tax exemptions already exist for property owned by the state, owned or used by churches or religious bodies, cemeteries, public libraries, and similar organizations.
There is a House bill (HB 1118) that is identical to the Senate proposal.
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