Loudoun Tax Rates Skyrocket in '10

Loudoun County VA government responds to its annual budget planning cycles as does every other local government: squeaky wheels get the grease.

Demands for continued and even increased spending not counter balanced with anti-tax protests are duly noted by public representatives. This leads property taxes on the uphill climb as Loudoun tax rates skyrocket for the 2010 fiscal year.

Compare and Contrast

In 2003, a the owner of a 1980s, entry level Loudoun townhouse assessed at $165,000, paid $1822 per year for its share of property taxes--even then, a high rate when compared with midwestern and southern US cities.

By 2008, the same townhouse is assessed at $185,000 but the tax payments are $3254 for the year. Are services markedly improved 2003 versus 2008? Revenues certainly are.

McMansion owners easily pay their tax tabs of $12,000+/year but financially stressed entry level homeowners scrimp or even succumb to foreclosure as their payments increase to cover higher tax rates.

Tax rate payments solidify demand for Loudoun luxury housing as entry and mid range housing buyer demand goes elsewhere.

Loudoun homebuyers are increasingly amenity sensitive more than they are price sensitive.

"No Resistance to Higher Rates"

As in years past, Loudoun homeowners are largely apathetic towards paying additional property taxes as the county's wealth standing easily absorbs the several hundred dollars per year required with each property tax increase.

Anti-tax protests are scattered compared with tightly organized pro-spending groups who specialize in political high drama.

As monthy tax payments increase, home prices are forced lower as buyers compare Loudoun's prices to Fairfax which, in many cases, offers lower cost housing options closer to work places--and includes a highly rated school system.

Higher taxes with declining home prices form a vicious cycle, reinforcing one another.

Higher Levels of Service Demanded

The predominance of luxury housing in the county guarantees that services will be demanded at high levels for "America's wealthiest county", a badge given by the US Census Bureau and worn with pride by many Loudouners.

Spending does not have to decrease as long as there is no ceiling on increasing taxes.

Yet as one supervisor, stated a few years ago: "If they don't like it, they can move to West Virginia!"

Loudouners recently voted to increase the county's debt by $104 million--a message heard loudly in county government offices. Voters also recently elected representatives to focus on slowing the county's growth with hopes of increasing the quality of life.

Loudouners seem to favor higher property taxes for a higher level of service, counter intuitive to conventional wisdom. Noone likes to pay more taxes but with a median household income of $116,000, most Loudouners pay the bill without comment.

Should a sizable anti-tax faction arise in Loudoun, ignoring the tax relief pleas could lead to draconian spending limits, imposed from the state like California's Proposition 13.

Loudoun's future will likely see a higher percentage of renters who pay no real estate taxes but are able to take advantage of county services as residents.

Higher Taxes=Lower Home Prices?

Home buyers in the Dulles area should take Loudoun's tax forecast into consideration when looking at Loudoun homes and future mortgage payments.

The county has much to offer but taxes are sure to increase more than neighboring jurisdictions for the foreseeable future (5 years+).

In some cases this is offset by lower home prices in Loudoun and a higher level of house, property and service than found in a comparable county.

A 2010 reset rate of 1.35 is under consideration go into effect July 1, 2009.

Current 2009 Property Tax Rates

Alexandria $0.845
Arlington .848
Town of Clifton .92
City of Fairfax .79
Fairfax County .92
Falls Church 1.03
Town of Herndon 1.16
Loudoun County 1.14
Town of Leesburg 1.32
City of Manassas 1.115
Manassas Park 1.27
Prince William County .97
Town of Vienna 1.1291

"What's a win for you?"