To help vehicle owners, the Fairfax County Board of Supervisors approved 15% tax relief for personal property taxes as part of their FY 2023 budget mark-up today. This action provides for almost $98 million in tax relief in total for vehicle owners.
“The pandemic caused an unprecedented spike in vehicle assessments, and it was imperative that we provide personal property tax relief to our residents,” said Fairfax County Board of Supervisors Chairman Jeffrey C. McKay. “This is why we approved 15% in tax relief for car, truck, and other vehicle owners by reducing the assessment ratio—the first time Fairfax County has ever done this. While the state’s share of personal property tax subsidies has been unchanged for 11 years, the County is taking decisive action that recognizes the financial hardship the pandemic has caused for many residents.”
Assessment Ratio Change
To offer relief, the Board of Supervisors approved assessing vehicles at only 85% of their market value rather than the normal 100%. State law grants local governments the option to change the assessment ratio to react to extenuating circumstances when they believe the fair market value for vehicles is less than 100%. This is the first time Fairfax County leaders have ever taken this action, and it is an unprecedented move.
Vehicle owners will see the 15% assessment reduction automatically incorporated into their personal property tax bills that will be mailed in July. Because this relief will already be applied, taxpayers won’t see a separate line on their bill that shows the reduction.
Vehicle Values Climb Due to Pandemic
Vehicle values have soared as a result of the pandemic that caused a worldwide shortage of computer chips needed for today’s cars and trucks. As a result, new cars are in short supply, and fewer people are selling their old cars. High consumer demand for vehicles combined with low supply have driven prices up sharply.
Typically, older cars go down in value every year. However, values climbed by an average of 33% as of Jan 1, according to the J.D. Power pricing guide. Fairfax County, along with every jurisdiction in the state, uses this guide to determine a vehicle’s value, and assessments are based on a car’s value as of Jan. 1 as required by law.
This steep increase in prices can be seen in some of the most popular car models on the road. For example, a 2020 Honda CR-V rose by 33.1% from $24,925 last year to $33,175 this year, according to J.D. Power. A 2018 Toyota Corolla jumped 43% in value to $21,600 whereas a 2016 Hyundai Tucson Utility SUV surged in value by 34.9% to more than $16,600.
Additional Tax Relief and Your Appealing Assessment
In addition to the approved 15% assessment reduction, seniors and people with disabilities may also apply for personal property tax relief. To qualify, residents must meet income and net worth limits with a $75,000 cap on total net assets as of Dec. 31, 2021.
Vehicle owners may appeal their car’s assessment if it has high mileage, body damage or serious mechanical defects as of Jan 1. Learn more about how to file an appeal. While vehicle owners wait for the results of an appeal, they should still pay their tax bill by the Oct. 5 due date to avoid penalties and interest charges. If your assessment is changed as a result of an appeal, you will receive a tax refund based on the corrected assessment.
For more information or questions about personal property taxes, contact the Fairfax County Department of Tax Administration by email or at 703-222-8234, TTY 711.
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