Real Estate Tax Relief Expanded For Fairfax Seniors, People With Disabilities (2024)

The income and net worth limits to qualify for real estate tax relief will be expanded for the first time in 15 years.

Posted Wed, Dec 8, 2021 at 3:52 pm ET

The Board of Supervisors voted Tuesday to expand the eligibility for real estate tax relief, which was last done in 2006. Currently, Fairfax County offers real estate and car tax relief for seniors 65 or older as well as people with disabilities who meet income and asset eligibility requirements.

Expanded income and net worth eligibility will come on Jan. 1, 2022, followed by a new tax bracket for relief and a tax payment deferral option on Jan. 1, 2023. In 2022, the maximum gross income to qualify for real estate tax relief (25 percent tax relief) will increase from $72,000 to $90,000. The cutoff for 50 percent tax relief will increase from $62,000 to $80,000. For 100 percent tax relief, the maximum income will increase from $52,000 to $60,000. In addition to proposed income eligibility changes, the net worth limit would increase from $340,000 to $400,000.

In 2023, a tax bracket for 75 percent tax relief will be added for those making up to $70,000 with a net worth limit up to $400,000. In addition, a deferral option will be made for real estate tax payments if their household has a maximum combined income of $100,000 and net worth of $500,000. Deferred taxes would collect interest at the Wall Street Journal prime rate plus 1 percent per year, or a maximum of 8 percent per year.

Several residents testified in support of the expansion. One point mentioned in testimony was the rising assessment values in Fairfax County. This year, Fairfax County homes increased in value by an average 4.25 percent. Even though the board approved the last budget with a one-cent reduction of the real estate tax rate, some homeowners saw their bill increase due to assessment values.

Catherine Cole, chair of the Fairfax Area Commission of Aging, testified in support of the expanded tax relief for seniors and people with disabilities. She highlighted the increased financial strain on seniors, particularly with income not keeping up with rising housing costs. She noted many seniors depend on Social Security, which increased by 5.9 percent this year to account for inflation. She personally saw her property assessment go up 13 percent.

"While many of our older adults may have been able to cope financially as incomes have crept up, are now finding themselves strained, now finding themselves with incomes higher than the threshold limits of the tax relief program set in 2006 but with real estate assessments that reflect the rapid rise of housing costs in 2020-2021," said Cole.

Daniel Campbell, another resident, spoke in support of expanded eligibility but urged the board to eliminate the net worth limit. He said he and his wife have two handicapped children and live in Fairfax County to be close to their son. and spend frugally, taking little out of their savings each month.

"Like many other parents of handicapped children, our goal is to preserve the bulk of our savings to leave in special needs trusts for our sons after we die," said Campbell. "A far more equitable program for seniors — and one which would better protect them — when the economy enters a period of high inflation as we are now, would be simply to freeze the property tax assessment when they retire, as do so many other counties around the nation."

Board of Supervisors Chairman Jeff McKay said there is a desire to look at this issue more regularly. He acknowledged there have been "many stories" of seniors struggling to afford a home they've owned for a long time.

"I know that all of us are eager to look at this more with more regularity as we move forward and certainly with what has happened with assessments the last couple years, this has become an acute need at this point," said McKay.

According to a staff report, there are 5,306 program participants receiving 100 percent tax relief, 816 receive 50 percent, and 517 receive 25 percent. An estimated 2,040 additional participants are expected with the expansion. The tax deferral program could draw an estimated 490 participants, staff estimated.