Portsmouth residential real estate values up 6.6%; personal property assessments on cars decrease

Natalie Anderson, The Virginian-Pilot
·4 min read

PORTSMOUTH — As City Council weighs tax rates for the upcoming fiscal budget, the latest assessments of real estate property show an overall increase in revenue for the city while personal property values on vehicles decreased.

Both Interim City Assessor Victor Edwards and Commissioner of the Revenue Franklin Edmondson presented information on real estate and personal property assessments, respectively, at a Tuesday work session with City Council members.

Overall, residential real estate values increased by 6.6% while commercial property values increased by 3.5%. That includes the assessment of more than 32,000 residential parcels across 191 neighborhoods and more than 2,000 commercial parcels in seven districts. Commercial properties include commercial businesses, industrial properties and multi-family housing.

Assessed real estate property value in the city was $9.96 billion last year, and increased by 5.7% to $10.52 billion this year. That amounts to an additional $7.09 million in tax revenue if the council opts to again levy an effective tax rate of $1.25 per $100 of assessed value. In last year’s fiscal budget, instead of changing the tax rate of $1.30, council approved a 5-cent tax credit.

Edwards also said properties across the city were on the market for a median of 17 days in 2023, with a national annual 30-year mortgage rate of 6.8%. The median home price also increased by 8.7% to $265,000, which puts it closer in line with comparable cities like Hampton, Newport News and Norfolk, which all have an older housing stock. Portsmouth was also recognized last year by Realtors.com for being the top market for first-time homebuyers.

Edwards said such metrics show signs of a healthy market.

“It shows we’re healthy and we’re still affordable,” he said.

Edwards was appointed interim last month after Interim City Assessor Janey Culpepper was ousted. Culpepper previously told The Virginian-Pilot her stint as interim had been spent making corrections to inaccuracies spotted in previously assessed property values.

Staffing levels and the implementation of more modern software are among the issues that have plagued the city assessor’s office in recent years. Edwards said staffing currently looks healthy and the CAMA system is slowly being implemented, with hopes it’ll be fully functioning by July.

Auto dealerships, bulk storage/plants and industrial distribution made up the biggest bulk of commercial property that saw increases in value. Edwards said four auto dealerships are in locations that straddle the cities of Portsmouth and Chesapeake, and for the first time, both cities partnered in this assessment process to split the values based on how much of the property was located in each city.

Edwards also attributed some of the increase in commercial value to the work of the Economic Development Authority and Portsmouth Ports and Industrial Commission to attract more revenue-generating properties.

In Portsmouth, around 40% of the land can’t be taxed mostly due to state or federal ownership of properties such as the Norfolk Naval Shipyard. Council member Mark Hugel said the council will soon be making a trip to Washington D.C. to meet with the city’s federal delegation and that members should discuss ways the city could generate even a small portion of revenue from nontaxable properties owned by the government, such as a payment-in-lieu-of-taxes option. City Attorney Lavonda Graham-Williams said such efforts could also be explored by working with the National League of Cities on the issue.

Real estate assessment notices will be mailed on or around March 8, Edwards said, with informal appeal hearings beginning March 18. Board of Equalization applications will be accepted through April 19.

Another tax levied on residents is the personal property tax, which is used for automobiles, recreational vehicles, mobile homes and business-related equipment. Portsmouth charges $5.00 per $100 of assessed value for tangible personal property like vehicles.

Rather than adjusting the personal property tax rate, cities can ease the burden on residents by calculating taxes based on a percentage of a vehicle’s assessed value. Last year, Portsmouth’s budget provided 50% off the assessed value of vehicles for the first $20,000 of value.

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Tax relief percentages are established annually by each city to exhaust the state’s allocation for relief, which is estimated between $9.3 million and $9.8 million for Portsmouth, Edmondson said. The city also supplements the allocation for added relief.

Though vehicle assessments had been on the rise during the pandemic, nearly all vehicle assessments decreased this year compared to calendar year 2023.

“Across the board, you’re seeing somewhere between a 6-7% decrease,” Edmondson said, adding that values are starting to “come back to a normal status.”

“So in Portsmouth, we see a larger number of individuals holding onto their older vehicles,” he also said.

Edmondson said this year’s revenue projection for all personal property is between $32 million and $34 million.

Edmondson said his team will soon formally propose keeping the tax relief rate at 50% this year. But Council member Bill Moody asked for more information about what other percentages of relief and revenue correlations.

Natalie Anderson, 757-732-1133, natalie.anderson@virginiamedia.com