Tax Relief

Prolonged tax break proposed for senior residence in Fairfax County

FAIRFAX COUNTY, VA – The Fairfax County’s Board of Directors is considering extending inheritance tax relief entitlements for the elderly and people with disabilities. On Tuesday, the board of directors scheduled a public hearing for December 7th.

The expanded eligibility would allow people with higher incomes and wealth to qualify, add a new 75 percent tax break, and provide an option to defer tax payments. The qualifications of the tax relief program have not changed since the 2006 fiscal year. If approved, the changes would come in two phases over the next two years.

Beginning January 1, 2022, it is proposed that the maximum gross income to qualify for a property tax break (25 percent tax break) be increased from $ 72,000 to $ 90,000. The cutoff for 50 percent tax relief is to be increased from $ 62,000 to $ 80,000. To qualify for a 100 percent tax break, the maximum income would go from $ 52,000 to $ 60,000. In addition to the proposed changes to income eligibility, the net asset limit would be increased from $ 340,000 to $ 400,000.

Other changes are recommended for January 1, 2023. A new proposed tax bracket for 75 percent tax relief would be available for incomes up to $ 70,000. Starting January 1, 2023, residents will also have the option to defer tax payments if their household has a maximum total income of $ 100,000 and a net worth of $ 500,000. Deferred taxes would accrue interest at the Wall Street Journal base rate plus 1 percent per year or a maximum of 8 percent per year.

The tax break for any tax break would be capped at 125 percent of the average estimated value of Fairfax County’s homes. For example, a resident with a $ 1 million home value approved 100 percent tax break would receive $ 8,660 in tax breaks and owe $ 2,740 in taxes. A resident with 100 percent tax relief and a home valued at $ 759,000 would have $ 8,653 in tax relief and would not owe any tax.

The tax relief program currently has 5,306 participants with 100 percent tax relief, 816 with 50 percent tax relief and 517 with 25 percent tax relief. The district expects an additional 2,040 participants in the three categories as a result of the extension of the right to participate in 2022.

Fairfax County offers real estate and motor vehicle tax breaks for seniors 65 and older and those with disabilities who meet income and property eligibility requirements. Exceptions are granted to disabled veterans or surviving spouses, surviving spouses of soldiers killed in action, and surviving spouses of first responders killed in action. The tax relief applications for the next year will open in January 2022 and are due on May 1, 2022.

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