The total taxable value of Richmond real estate rose 7.3 percent in new tax assessment notices mailed to city property owners this week, the biggest year-over-year increase in a decade.
The average assessed value of a Richmond home jumped from $228,000 to $247,000, an 8.3 percent bump that means the average residential tax bill will increase $228.
Commercial and multifamily properties saw a slightly smaller increase, rising 6.1 percent on strong growth in Manchester and Scott’s Addition.
Experts said the increase reflects the intensely competitive Richmond real estate market after a spring sales season that saw many houses — particularly those priced below $300,000 — sold within a few days of hitting the market.
The 7.3 percent overall change is dramatically higher than other recent year-over-year increases. In 2017, property values rose 3.5 percent, building on a 3 percent increase in 2016.
This year’s percentage increase was the highest since 2008, when taxable values rose 8.1 percent.
“We haven’t had a market that has been as hot as it is now,” said City Assessor Richie McKeithen, whose office is tasked with estimating the fair market value of city properties each year. “We’re just experiencing what other parts of the country are experiencing as far as increased real estate values.”
Property values in the city grew at a faster rate than neighboring counties. In Henrico County, total taxable values went up 4.7 percent. Chesterfield County saw a total increase of 3.7 percent.
The city budget passed in May projected a 6.8 percent increase in taxable real estate value, which gave Mayor Levar Stoney and the City Council roughly $19.7 million in extra revenue. Because assessments came in slightly higher than projected, the city could see even more new real estate revenue. But the final amount will depend on how many assessments are appealed and how many tax bills are actually paid.
Residential property values were up throughout the city, but the biggest increases were seen in the Randolph, Stadium and Creighton/Fairmount assessment areas, which all saw taxable values rise more than 20 percent.
“I actually think this is reflective of a really healthy market because where you’re seeing these kinds of spikes, they’re diverse neighborhoods,” said Laura Lafayette, CEO of the Richmond Association of Realtors. “So it suggests to me we’re attracting a variety of kinds of buyers and renters and we are providing different choices. And those choices are really attractive.”
The Fan and Museum districts, the neighborhoods with the highest total taxable value, saw assessments rise 9.6 percent and 10.8 percent, respectively.
Richmond’s real estate tax rate is $1.20 per $100 of assessed value. The new assessments will be used to calculate tax bills mailed to city property owners next year.
Even though higher assessments lead to griping about higher tax burdens, Lafayette said, there’s a bright side.
“I’m not suggesting people who are on fixed incomes won’t see this as a challenge. And it can be a challenge,” Lafayette said. “But for the majority of homeowners, this is good news. Because it means that their primary investment continues to increase in value.”