A return to normal: Tax relief percentage drops in Prince Edward
Published 6:41 am Friday, October 13, 2023
Prince Edward County residents are going to get a bit less tax relief on their personal property this year. And for that, you can thank declining vehicle values.
At their Tuesday, Oct. 10 meeting, the Board of Supervisors voted unanimously to reduce the Personal Property Tax Relief (PPTR) percentage to 25.75% of assessed value. That’s down from 37.50% last year. The reason for the change, officials explained, is the lower values for vehicles.
“We set it higher artificially last year, when the value of vehicles jumped up,” said Prince Edward County Administrator Doug Stanley. “They have dropped back down, so we are back to what we call normal.”
Last year, the values for used vehicles climbed, thanks to an inventory shortage at the time. Beginning in 2021, the number of new vehicles available dropped, due to COVID-19 and the global supply chain. Last year at this point, stores were selling most, if not all of their stock orders months before they arrived on the lot. As values climbed, so did the amount people owed on personal property taxes. That meant used vehicles were artificially selling for much higher than previous values, sometimes nearly double. But as that value increased, so did the personal property tax burden on local residents.
To ease that burden, supervisors in October 2022 significantly raised the PPTR percentage, reducing what residents owe. But now, as values are dropping back to normal, supervisors decided it was time to bring the tax relief back down as well.
What is a tax relief percentage?
In Virginia, cities and counties follow what’s called the Personal Property Tax Relief Act. The state law orders that all localities have to subsidize at least a portion of the taxes owed on the first $20,000 of a vehicle’s assessed value. Each year, the city or county sets their PPTR rate to do this, reducing the final bill owed by a resident.
For example, let’s say a city or county sets the PPTR rate at 24%. That means for a car assessed at a value of $20,000, the resident would owe $684. Then let’s say the next year, the city or county sets the rate at 35%. If the vehicle’s value remains the same, that resident would only pay $585, saving nearly $100.