Four city councilors are backing a proposal to let some Richmonders put off paying real estate tax increases until they either are on better financial footing or sell the property. 

“I want to use all the tools in the toolbox to help make sure people can stay in their homes,” Councilor Sarah Abubaker (4th District), the chief backer of the idea, told The Richmonder. 

While Richmond has not raised its real estate tax rate of $1.20 per $100 of assessed value since 2008, skyrocketing assessments have led to much higher tax bills across the city, straining many households’ budgets. 

Under Abubaker’s plan, certain homeowners would be able to defer payment on real estate taxes that were more than 105% of what they paid in the prior year. 

That means that if the owner owed $1,000 in taxes the prior year but faced $1,200 in the current year, they could defer up to $150 of their bill. 

Abubaker acknowledged the amounts under discussion might not be very high per household but said they could still make a difference to those struggling to make ends meet. 

Even $200 “is a week’s worth of groceries for a family of four,” she said. 

Property owners wouldn’t be off the hook for the money. Instead, the city would place a lien on their property equal to the amount of taxes owed, as well as annual interest of 2% or a rate set by the Internal Revenue Service, “whichever is less.” 

Those amounts could be paid back at any time but would have to be paid when the property was sold or transferred. If the owner died without having paid off the deferred tax, the debt would have to be settled from the estate within a year of the death. 

Abubaker said she’s tried to build an array of safeguards into her proposal to target the relief to those who most need it.

“Someone who has a $10 million house is not eligible for this program,” said Abubaker. 

To get a deferral, a property owner would have to occupy the home as their “sole dwelling,” not be participating in other real estate tax relief programs run by the city and not be behind on their tax payments. 

Additionally, the assessed value of their property would have to be less than or equal to 200% of the city’s median assessed value for residential properties. 

A memo written by City Council analysts for Abubaker puts the median residential assessment in Richmond for 2026 at $325,000, meaning that properties valued at up to $650,000 would be eligible. 

Mayor Danny Avula said he had reviewed the proposal but that as written, it “raises some questions about how it would function in practice.” 

“While we’re very interested in approaches that genuinely help residents struggling with real estate taxes, any solution has to be workable and capable of delivering the support it promises,” he said in a statement, adding that he is eager to work with the City Council “to more fully understand the impacts and identify an appropriate path forward.” 

What impact the proposal would have on the city budget is unclear. The ordinance sets a maximum amount that someone could owe in deferred taxes and interest on a single property over their lifetime at $50,000. But it’s difficult for officials to predict how many property owners might take advantage of the program. 

If 25% of property owners chose to participate, City Council analysts have calculated the fiscal impact would be roughly $391,000. Full participation — an unlikely scenario given the unwillingness of many homeowners to place liens on their property if they can avoid it — would cost about $1.56 million. 

Richmond is owed $314.4 million in real estate taxes for residential and condominium properties this year. 

Deferral programs have had a checkered history in Virginia. While a 1990 state law allowed local governments to offer them more broadly, they have most commonly been extended to people who are elderly or have disabilities. 

In some places, the programs have failed to gain much traction. Fairfax County, the state’s largest locality by population, discontinued its deferral program for elderly and disabled people in 1990 due to “low participation,” officials said in budget documents several years ago. At the program’s peak in 1986, only 38 people signed up. 

“The disincentive appeared to be that citizens did not want to leave accumulated debt with their estate,” wrote county officials, who also noted that some other localities had found “that mortgage companies do not allow for the deferral of taxes.” 

Easing strain 

As home assessments have climbed in Richmond over the past decade, government officials have split over the best ways to ease the strain. 

While the resulting increase in real estate tax revenue — which rose from roughly $231 million in fiscal year 2017 to more than $500 million this year for all properties — has been a boon for the city’s budget and a windfall to residents willing to sell their homes, it has put stress on many households’ finances, particularly in neighborhoods where values have doubled or tripled. 

Both Mayor Danny Avula’s administration and that of former Mayor Levar Stoney have resisted calls to lower the tax rate, arguing it would lead to detrimental cuts in services and disproportionately benefit wealthier taxpayers. 

With tax cuts off the table, only a few options are available for local governments, whose powers to provide other forms of relief are limited by state law. 

The city already offers exemptions or assessment freezes for certain people over the age of 65 or with disabilities and has experimented with tax abatements for renovated properties. In 2025, property owners got a one-time tax rebate of about $150 on average, although the distribution was marred by a Finance Department error that accidentally issued thousands of checks to the “Hartshorn Community Council.”  

The Richmond City Council has also shown interest in the possibility of a long-term owner occupancy program, or LOOP. 

Pioneered in Philadelphia, a LOOP lets homeowners who have lived in their property for a certain amount of time and meet income criteria lock in their assessment value to prevent future increases due to rising valuations. (Tax bills can still change if the local government increases the tax rate.) 

The approach isn’t currently legal in Virginia, a Dillon Rule state where local governments can only exercise those powers explicitly granted them by the legislature. 

Interest in the approach, however, led the General Assembly to order a study in 2025. Richmond listed completion of that study among its top priorities for this year’s legislative session. 

The analysis, which was published this winter, recommended that any legislation allowing LOOPs should make sure they are “a local option, not mandated,” and grant local governments the flexibility to design the programs as they see fit. 

While the study acknowledged LOOPs could help with housing stability, it also issued a warning about unintended consequences.

Because tax relief for some means less revenue flows to the local government, the program could lead to additional demands on younger residents, who are already facing record-high housing prices and acquiring real estate much later than the previous two generations. 

“Real property tax relief based on length of ownership may place additional tax burdens on younger middle-class homeowners and first-time homebuyers,” Virginia’s study found. “In order to cover the cost of longtime owner real property tax relief, localities may have to increase real estate taxes on the other residents.”

Contact Reporter Sarah Vogelsong at svogelsong@richmonder.org