Rising home prices give Chesterfield budget a boost

CHESTERFIELD, Va. (WRIC) — Chesterfield’s budget got a $35 million boost, thanks in part to rising home prices across the county – and despite a real estate tax cut approved this year.

At a meeting on April 6, the board approved a final budget totaling $905.5 million in local revenue and spending. Adjusted for inflation, last year’s budget topped out at $870.5 million.

The vast majority of that money – which does not include hundreds of millions in state and federal funding paid directly to support the school system – came from the county’s real estate tax.

That tax alone raked in an extra $23 million dollars, even though the County cut the tax rate by 3 cents. That move was “designed to mitigate the impact of inflation on household finances,” a county spokesperson said.

Virginia law requires that real estate taxes be assessed at “fair market value” – but deciding what’s fair can be a tricky proposition for county assessors.

After all, a developer might be willing to pay a high price for farmland near a proposed county road – but does that mean a farmer should have to pay more in property taxes on it?

Likewise, home prices are rising in Chesterfield, with data from county records showing that the growth in prices began accelerating in 2020 and 2021.

But rising home prices don’t necessarily mean rising income, so some residents may find themselves with homes that are literally too valuable to keep.

The county has offered tax relief for elderly and disabled residents for years, but this year the board cut the overall rate to .92% – meaning residents will have to pay 92 cents for every $100 of value in their home.

According to the county, the real estate tax is now “the lowest it has been in Chesterfield over at least the past 50 years.”

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