The Henrico County Board of Supervisors this week voted to return $11.2 million in surplus taxes to residential and business property owners to help offset the impacts of rising real estate values.

Proposed in February, the real estate tax credit represents Henrico’s second return of surplus tax dollars in as many years. Homeowners and other property owners will receive an amount equal to 2 cents per $100 of their real estate’s taxable value. For example, a single-family home with the average assessed value of $367,000 will generate a credit of $73.40. ($367,000/100 x .02=$73.40) 

“Henrico County is pleased to be able to provide substantial tax relief to homeowners for a second straight year,” said Sheila S. Minor, director of the Department of Finance. “The Board of Supervisors endorsed the idea early on, and it made sense, given the county’s solid financial position, community support of last year’s tax credit and a strong housing market in early 2023.”

Individual credits of $30 or more will be paid in 95,000 checks issued in September, just before the mailing of 2023’s second installment real estate tax bills. Amounts less than $30 will be credited directly on 16,000 bills. For property owners who owe delinquent taxes, the credit will be applied to the outstanding balance and to any future bills if the credit exceeds the amount due.

Property owners receiving a credit who pay their taxes through an escrow account – for example, as part of their mortgage – likely will not see their credit reflected until accounts are reconciled later in the year. 

In adopting a similar, 2-cents-per-$100 credit in 2022, Henrico became the first locality in Virginia to return surplus real estate taxes to property owners under a 2005 state law.

Property values have risen across the region due to a sustained demand for and a limited supply of housing. The average value of a single-family home increased by 13.9%, from $322,200 in 2022 to $367,000 in 2023. At those values, the owner faced an increase in real estate taxes of $381 without tax relief. As a result of the Board’s 5-0 vote Tuesday, the owner will now receive a check for $73.40.

“We encourage property owners to look for these checks in the mail in late September,” Minor said. “Don’t assume plain envelopes are always junk mail.”

County officials planned for the real estate tax credit this spring when preparing the county’s budget for fiscal 2023-24. The $11.2 million being returned to taxpayers will not affect funding for education, public safety or other county services and otherwise would have gone into the county’s fund balance.