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CL-2333 New Business   Item #: B.       
Meeting Date: 05/21/2020  
Subject:    Real Estate Tax Rate
From: Cynthia Thomasson

COUNCIL ACTION
First Reading: 05/21/2020                                          
Final Adoption: 06/02/2020
SUMMARY
The Real Estate reassessment is currently underway.  Current projections anticipate an overall increase of 3.05% in assessed values as compared to the current assessment.  The majority of the anticipated increase, or 3.05%, relates to the reassessment of existing property, while approximately 0.5% is attributed to new construction.
BACKGROUND
The Commonwealth of Virginia Code requires that reassessments resulting in an increase in assessment of 1% or greater be advertised as a tax increase.  The advertisement of the real estate tax has to be published 30 days in advance.  At that time, the City advertised a real estate tax rate of $0.84 per $100 as an effective tax rate increase of no more than 3%.  Current data anticipates that maintaining the current rate of $0.84 would represent a 2.5 cent increase from a revenue neutral rate.  For example, property assessed at $100,000 in the current year would be reassessed at $103,000 and the tax bill would increase from $840.00 to $865.20 annually, an increase of $25.20 annually or $12.60 per installment.  The estimated increase is an overall average and individual properties may increase at a greater or lesser percentage, The increase in the general reassessment together with new construction is anticipated to generate a $579,000 increase in real estate revenue for the FY 2021 Budget.  The Proposed Budget includes an increase of $180,000 representing an estimated 1.26% increase in assessed values.
RECOMMENDATION
It is recommended that Danville City Council adopt the attached Ordinance maintaining the current real estate tax rate.

Attachments
Ordinance


    

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