RECAP allows maximum household income of $105,000, net worth of $700,000, excluding value of the home and up to 10 acres
The Henrico County Board of Supervisors on Tuesday voted unanimously to approve a tax relief program that will cap the real estate tax bills of qualifying homeowners who are older or disabled, helping to ease the higher costs associated with rising property values.
The Real Estate CAP Program (RECAP) builds on Henrico’s Real Estate Advantage Program (REAP), which provides a real estate tax exemption of up to $3,200 for qualifying homeowners with a household income up to $75,000 and a net worth up to $500,000.
To qualify for RECAP, homeowners will need to be at least age 65 or totally and permanently disabled with a maximum household income of $105,000 and a net worth of $700,000, excluding the value of their home and up to 10 acres. The program will take effect for the 2024 tax year.
Three Chopt District Supervisor Tommy Branin, who first proposed the concept that became RECAP, called the program groundbreaking and a great way to provide additional tax relief to Henrico’s most vulnerable residents, particularly those living on fixed incomes.
“I am darn proud that this county is the first to come out anywhere in the state … with this kind of program,” Branin said. “I would foresee this program becoming better as we move down the road.”
Henrico’s program provides more tax relief than similar programs across the state because it offers the 100% tax exemption under REAP and the new thresholds for household income and net worth under RECAP.
RECAP will lock in, or cap, the annual real estate tax bill of qualifying homeowners so it never exceeds the amount billed when they enter the program. In subsequent years, participants will receive a real estate tax exemption equal to the difference between their new tax amount and their base year’s tax amount. In effect, tax bills will not increase for those who remain qualified, even if assessments rise.
If a RECAP participant’s tax drops below the base year amount due to a lower assessed value or tax rate, their bill will reflect the lower amount. The participant would need to reapply to the program to establish the lower tax amount as their new base amount.
Homeowners will be able to apply for RECAP and REAP on the same form beginning in February; the deadline for applications is April 1.
RECAP follows other recent tax relief measures by Henrico that will total an estimated $26.3 million in 2023. These include $11.2 million from a real estate tax credit, $3.6 million from a personal property tax rate cut and $11.5 million from REAP.
Here’s a hypothetical example of how the Real Estate CAP Program would work for a qualifying resident with a home assessed at $350,000 in 2023. Henrico’s real estate tax rate is 85 cents per $100 of assessed value.