Photo by Slade Lapusnak on Unsplash

ALEXANDRIA, VA — Many Alexandria residents have seen the value of their cars increase over the past year, due to how the pandemic has affected the used car market. This is expected to continue as the city adjusts to a new normal. Keep in mind that the phenomenon usually does not occur.

Since City Manager James Parajon presented his fiscal year 2023 budget proposal to City Council in February, Alexandria officials have learned that the revenue increase will be well above the 8.5% previously projected. Estimates range from 26 to 87 percent for each vehicle registered in the city.

“It’s amazing,” wrote Justin Wilson in his latest newsletter. “To protect ratepayers, the City Manager has presented Council with a proposal for one-time relief for vehicle owners.”

The proposal would accomplish the following:

  • Appraise only 77% of the fair market value of vehicles
  • Expect no 2022 taxes for vehicles valued at $5,000 or less, and lesser relief amounts for cars with a higher value

While all vehicle owners would receive tax relief, those with the lowest assessments would receive the most relief.

The city council will make a decision on the proposal next month. The mayor “hopes that the used car market will return to normal next year”.

The Virginia General Assembly in 1998 passed the Personal Property Tax Relief Act. This was supposed to “begin to eliminate” the vehicle personal property tax, according to Wilson, which is based on a vehicle’s assessed value and is the second-largest amount of revenue in Alexandria’s general fund.

The tax remained, however, after Virginia did not receive the revenue she expected. Currently, Alexandria receives an annual credit of $23.5 million from the state.

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