Property taxes: Virginia has relatively moderate property tax rates compared to other states. However, the actual amount of property tax owed depends on the property’s assessed value and the specific rate in the locality. Some counties and cities offer tax relief programs for seniors and disabled individuals, which can reduce or even eliminate property taxes for qualifying residents. Retirees should check with their local tax assessor’s office to see if they qualify for any property tax relief programs.
Sales taxes: The state sales tax rate in Virginia is 4.3% with an additional local sales tax rate that can bring the total to 5.3% to 7%, depending on the locality. Sales tax applies to most goods and services, which can impact retirees’ spending, especially those with fixed incomes. Budgeting for sales tax is an essential part of managing living expenses in retirement.
Estate and inheritance taxes: Virginia does not impose an estate tax or inheritance tax, making it more favorable for retirees concerned about transferring wealth to heirs. This policy can be helpful for retirees with a significant amount of assets, as it allows them to pass on their estate without additional state tax burdens. However, federal estate tax laws still apply, so retirees with substantial estates should engage in estate planning to manage potential federal tax liabilities.
Vehicle taxes: Virginia imposes a personal property tax on vehicles, which is assessed annually based on the vehicle’s value. Retirees should be aware of this tax, as it can add to the overall cost of owning a vehicle. Some localities may offer tax relief or exemptions for seniors, so it’s worth exploring options to minimize this expense.