For many Virginia retirees, the home is both their largest asset and a source of ongoing costs. Real estate taxes are set and collected by each city and county, and as home values rise, tax bills can become a real strain on a fixed income.
Virginia law allows localities to offer real estate tax relief to qualifying older and disabled homeowners. Many do, including the City of Harrisonburg and Rockingham County, but the details vary, so it pays to understand how your local program works.
Who may qualify
These programs are generally available to homeowners who are at least 65 years old or permanently and totally disabled, who own and live in the home as their primary residence and whose household income and net worth fall below limits set by the locality. Depending on the program, qualifying homeowners may receive a full exemption, a partial exemption or a deferral of some or all of their real estate taxes.
Virginia also provides a real estate tax exemption on the primary residence of veterans with a 100 percent service-connected, permanent and total disability, and for certain surviving spouses. Because these rules are set by law and local ordinance, check the current requirements for your locality each year.
A short application could keep thousands of dollars in your retirement budget.
How to apply and plan ahead
Applications are usually filed with the Commissioner of the Revenue or the real estate office for your city or county. You will typically need proof of age or disability, proof of ownership and residence and documentation of household income and assets. Many localities require you to reapply or confirm eligibility each year, and filing deadlines apply.
If you receive a deferral rather than an exemption, understand how the deferred taxes will be repaid, often when the home is sold or transferred. Factor that into your estate plan so your family is not surprised later.
Finally, put any savings to work. Lower property taxes can free up money for healthcare costs, an emergency fund or required minimum distributions planning in retirement.
The advisors at Investment Pro Tips help Harrisonburg and Rockingham County retirees plan for property taxes, income and investments. Contact us for a free portfolio review.