Who sets property tax rates?

Property tax rates in the state of Virginia are set on the local level by county and city governments. The County Board of Supervisors sets the rate for unincorporated areas of the county, while the city council sets the rate for cities within the county. The Virginia Constitution requires all property to be assessed at 100% of fair market value. That assessed value is then multiplied by the tax rate to determine each property’s tax liability. The tax rate in Virginia is expressed as a percentage of the assessed value, or “dollars per hundred.” For example, a tax rate of $1.10 per $100 of assessed value would be calculated as $1.10 x 100 = $110 taxes owed. The Virginia Constitution requires the state to provide a local fiscal relief fund to help defray the costs of financing local government operations. This formula is based on a broad range of factors and serves as the basis for determining each locality’s required tax rate. As the cost of local government services grow, localities may find it necessary to adopt a higher tax rate in order to meet their financial obligations. The state also allows localities to use other revenue sources as necessary to meet their obligations. In summary, local county and city governments in Virginia are responsible for setting property tax rates. These rates are based on the assessed value of the property, the cost of local government operations, and fiscal relief funds provided by the state.

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