Living in an historic town can be a big draw for many home buyers with charming old buildings, shops, and sense of community, but it’s important to understand that you tend to pay a premium to be close to those amenities. This isn’t a deterrent for many home buyers who value being close to a charming downtown area, but it’s worth noting the historic towns of Herndon and Vienna are outliers in the region with additional town real estate taxes on top of county real estate tax. To help put these added taxes in perspective, here is a list of the region’s real estate taxes.
2018-2019 Regional Real Estate Tax Rates (Rates are per $100 of assessed value):
City Of Alexandria: $1.13
Arlington County: $1.013
City Of Fairfax: $1.06
Fairfax County: $1.15 (base rate)
City Of Falls Church: $1.355
Town Of Herndon: $0.265 + $1.18(Fairfax County Tax) = $1.445
Loudoun County: $1.045
Prince William County: $1.207
Town Of Vienna: $0.225 + $1.18(Fairfax County Tax) = $1.405
(Click names above for hyperlinks to the town/county websites that have the most current tax rates.)
When you add Fairfax County tax on top of town tax in Herndon or Vienna you are looking at an overall real estate tax rate of $1.405 for Vienna and $1.445 for Herndon, which is the highest in the region. What type of impact does this have on a 500k property? Here is a breakdown:
Herndon: Tax rate, $0.265 x $100 of assessed value. 500,000 / 100 = 5,000 x $0.265 = $1,325
Vienna: Tax rate, $0.225 per $100 of assessed value. 500,000 / 100 = 5,000 x $0.225 = $1,125
Paying an extra $102 a month in taxes (average of both rates) is nominal for the average homeowner in Northern Virginia, but it does make a difference for investors with rental properties and homeowners who’ve paid their mortgage in full because they notice the extra $1,000 coming out of their pockets at tax time. Savvy first-time home buyers who run the numbers would also be able to afford an additional 15k of home if they purchased outside of town limits.
My advice is to take these taxes with a grain of salt, especially if you are considering moving to the Dulles corridor, because Reston has a $57.75 HOA fee and while the town of Herndon and Vienna do have added taxes, many of the older neighborhoods don’t have HOAs, a feature which is increasingly hard to find in newer neighborhoods, and may offset the added real estate tax in the these areas.
Ultimately there are may other factors that go into selecting the best area to live, but being aware of regional tax rates can make a difference in the Northern Virginia area where homes worth millions of dollars are common.