The Commonwealth of Virginia is a state composed of 95 counties and 38 independent cities. Cities and towns each have their own local governments, and towns are considered the same as counties in terms of government and taxation. Homeowners' property tax assessments are performed and collected annually by each county and city through their own departments of real estate assessment and finance. For example, the city of Alexandria has an Office of Real Estate Assessment that estimates the fair market value of every property annually. The information is distributed to the Department of Finance to bill and collect the property tax. Alexandria receives 58% of total annual city revenues from property tax proceeds. Virginia has the 34th-highest property tax among states in the nation.

Median Property Tax Compared to the National Average

The median home value in Virginia is $252,600, which amounts to an average property tax bill of $1,862 at the average tax rate of 0.74% of property value. Virginia ranks 21st in the nation for the median dollar amount of property tax. The median income in Virginia is $73,565 per year, so property taxes account for 2.53% of the median income annually. Consequently, Virginia is ranked 29th in the country for property tax as a percentage of income.

Highest to Lowest County Tax Rates

Among the 133 jurisdictions in the Commonwealth of Virginia, the city of Falls Church has the highest property income tax at 0.94%. Based on the median home value of $641,900, this results in an average annual property tax bill of $6,005. The high property values can be attributed to being home to some of the largest defense and technology companies, such as General Dynamics (NYSE: GD), Northrop Grumman Corporation (NYSE: NOC) and Computer Sciences Corporation (NYSE: CSC). The defense contractors are based within close proximity to the Pentagon.

Fairfax County has the second-highest property tax rate at 0.89%. The median home value is $507,800, which results in a $4,543 property bill. Arlington County has the third-highest property tax rate at 0.80% of assessed property value on the median home value at $571,100, and as a result, the average property tax bill is $4,564. Arlington is home to major Internet, finance and energy companies, and its major employers include CACI International Inc. (NYSE: CACI), Rosetta Stone Inc. (NYSE: RST), The AES Corporation (NYSE: AES), Gridpoint and Touchstone Energy, among others. The demand for housing rises when large public companies locate their headquarters in a region, thereby increasing property values due to demand.

Buchanan Country has the lowest property tax rate in the state at 0.46% of the median home value of $62,000, for a $284 property tax bill. This places the county at 2,569th out of 3,143 counties in the nation's rankings of highest county property tax percentage rates. Lunenburg County has the second-lowest property tax rate with 0.47% on a median property value of $101,500, for an annual property tax bill of $473. Wise County and Russell County share the third-lowest property tax rate of 0.56%. The median home value in Wise County is $77,100 for an average property tax bill of $428, and in Russell County, the median home value is $85,200 for a tax bill of just $477.

Comparing to Neighboring States

Virginia places 37th place for a mean effective owner-occupied housing property tax rate of 0.78%. Neighboring states include Maryland in 22nd place at 1.10%, West Virginia in 45th place at 0.59%, Kentucky in 32nd place at 0.85%, Tennessee in 38th place at 0.75% and North Carolina at 33rd place at 0.85%. Virginia has relatively lower property taxes than the majority of the nation states.

Conclusions

Virginia has a diversified mix of modern cities to small towns, and the property tax rate is proportionate to the size of the region and population. Generally, property tax rates are higher for regions with higher median home values and bigger populations. The overall lower tax rate compared nationally is offset by the higher value of the median home prices in the top counties. This is evidenced by the highest county rate of 0.94% in Fairfax County, with a population of 1.31 million residents in an area of 406 square miles. The lowest county property tax rate of 0.46% is Buchanan Country, which has a population of 1,178 residents in an area of 2.2 square miles, as of 2010.

West Virginia Property Tax Guide

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