Personal Property Taxes

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NOTICE: COVID Impact on Some Vehicle Values

The COVID-19 pandemic had a significant impact on vehicle values over the year 2020 which has led to lower than expected depreciation, and in some cases, increased values for 2021.

Historically, vehicle values usually depreciate from month to month. Therefore, the value of any vehicle on January 1st when we must make the assessment would usually be lower than the value of that same vehicle the previous January. In early 2020, vehicle values were trending as expected. However, in March 2020, COVID-19 changed the anticipated trends of the automobile industry resulting in increased market values from all major vehicle valuation services between January 2020 & January 2021. Over the summer of 2020, used car prices increased over 10% for the US market as a whole. Several market events beginning as far back as mid-2019 took part in the values established January 2021. 

These events include but are not limited to:

  • In March of 2020 the Federal Reserve cut interest rates to near 0%. These extremely low interest rates on both new and used vehicles allowed consumers to purchase vehicles sooner than they would have previously, thus increasing the demand for new and used vehicles.
  • Many auto manufacturing plants ceased vehicle production and were re-tooled to begin producing ventilators and other personal protective equipment causing a reduction in vehicle inventory.
  • Large fleet companies (E.G.: rental agencies and other vehicle services) chose not to replace inventory adding to the shortage of used vehicles in the market. 

In accordance with The Code of Virginia 58.1-3503, the City of Charlottesville Commissioner of the Revenue uses the "Clean Trade-in Value" established by NADA as fair market value.

Personal Property Tax Exemption for Disabled Veterans

The Constitution of Virginia [Article X, Section 6(a)(8)] and Virginia Code §58.1-3668 was amended effective January 1, 2021 to exempt from taxation one motor vehicle owned and used primarily by or for any Veteran of the Armed Forces or Virginia National Guard who meets the following criteria: 

  • Veteran must have been rated by the US Department of Veterans affairs or its successor agency pursuant to federal law with a 100% service-connected, permanent and total disability.
  • The one motor vehicle includes only a passenger car or a pickup or panel truck that is registered for personal use.
  • Any such motor vehicle owned by a married person may qualify if either spouse is a Veteran of the Armed Forces or Virginia National Guard who is rated with a 100% service-connected, total and permanent disability.
  • This exemption shall be applicable beginning on the date the motor vehicle is acquired or January 1, 2021, whichever is later, and shall not be applicable for any period prior to January 1, 2021.
  • Once a vehicle has been selected to receive the exemption, another vehicle (i.e. a replacement vehicle or a vehicle purchased mid-year) can only be selected if the original vehicle is disposed or sold.
  • Leased vehicles and vehicles owned by a business will not qualify.

The following questions and answers will provide the taxpayer with a basic understanding of the assessment of personal property tax on vehicles. For further questions concerning personal property tax, please call 434-970-3160 or send us an email at citycor@charlottesville.gov.

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