Hardship Option Considered For Alexandria Real Estate Tax Payment

ALEXANDRIA, VA — On Saturday, Alexandria City Council will consider a resolution allowing taxpayers to request waivers of penalties and interest for late real estate tax payments based on financial hardship tied to the pandemic.

The city’s second installment of 2020 real estate taxes are due on Nov. 16. Late payments are typically associated with penalties — 5 percent if not paid within 15 days and 10 percent if more than 15 days late. Interest is also charged at 10 percent per annum for the first year of delinquency, and at 5 percent per annum for every year thereafter.

If council approves the resolution, city staff would be directed to consider waivers of late payment penalties and interest for the real estate tax until March 1, 2021 for taxpayers facing financial hardships related to the pandemic. Late payments beyond March 1, 2021 would continue to accrue late penalties and interest.

Normally, the Code of Virginia and City Charter give the director of finance authority to grant waivers if the failure to pay on time is “no fault of the taxpayer” or an error on the part of the city. These waivers are considered on a case-by-case basis and typically involve situations like medical incapacitation.

A memo from City Manager Mark Jinks explains why a real estate payment tax extension was not proposed instead of a hardship waiver by request:

Mortgage companies typically pay these taxes to the City by the applicable due date. An extension in that case would do no good for these taxpayers. Moreover, many taxpayers do indeed want their Real Estate Taxes paid during calendar year 2020 in order to benefit from the associated federal and state Income Tax deductions. A deadline extension applicable to all properties could be disruptive to this process. Based on this, staff recommends using the short-term waiver process as the most efficacious way to provide flexibility to taxpayers facing economic hardship due to COVID-19.

The anticipated fiscal impact of the proposed hardship option is a small amount of penalty and interest revenue. The real estate tax accounts for over 60 percent of the city’s general fund budget.

This article originally appeared on the Del Ray Patch

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