When a married homeowner applies for Virginia's elderly/disabled real estate tax relief, does the absent or separated spouse's net worth still count, even if the spouse isn't on the deed?

Plain-English summary

Loudoun County's elderly and disabled real estate tax relief program requires applicants to satisfy a "net combined financial worth" cap. Some married applicants pushed back: their spouses had abandoned them or were separated, the spouse's name wasn't on the deed, and in some cases they didn't know where the spouse was. They argued they shouldn't have to include the spouse's net worth.

The AG sided with the Commissioner of the Revenue. Section 58.1-3211(2) is unambiguous. It includes in net combined financial worth "the value of all equitable interests . . . of the owners, and of the spouse of any owner." The statute does not require the spouse to be an owner, to be on the deed, or to live with the applicant. The only thing that matters is whether the applicant has a spouse. If yes, the spouse's net worth is in the calculation.

Two reasons backed the literal reading. First, real estate tax exemptions must be strictly construed against the applicant under Va. Const. art. X, § 6(f). DKM Richmond Assoc., L.P. v. City of Richmond, 249 Va. 401 (1995); Westminster-Canterbury of Hampton Roads, Inc. v. City of Virginia Beach, 238 Va. 493 (1989). Doubt resolves against the exemption-seeker. Second, the General Assembly knew how to write a residence-based test when it wanted to. Section 58.1-3211(1) tests income based on persons "residing in the dwelling." The legislature did not use comparable language in subsection (2). The contrast tells the reader that subsection (2) was meant to include the spouse regardless of living arrangements.

The opinion's practical effect: an applicant who cannot account for an estranged spouse's whereabouts or finances cannot use that fact to escape the spousal disclosure requirement. The applicant remains responsible for reporting the spouse's net worth as best they can, and inability to do so can be grounds for denial.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Virginia voters approved a constitutional amendment on November 2, 2010 (just after this opinion was issued) that gave the General Assembly broader authority over the income and net worth limits for elderly and disabled tax exemptions. The statutory framework has been revised several times since. Anyone applying today should look at current law, especially the net worth ceiling and any local rules in their jurisdiction.

Common questions

Why does the spouse's net worth count if the spouse doesn't own the property?
Because the General Assembly tied the financial cap to the household, not the deed. Section 58.1-3211(2) explicitly says the calculation includes the net worth "of the owners, and of the spouse of any owner." Marriage, not deed ownership, is the trigger.

What if my spouse left years ago and I have no idea where they are?
This opinion does not provide a workaround. The duty to report the spouse's net worth remains. If the applicant cannot account for the spouse's finances, the locality may treat the application as incomplete or deny it. Anyone in that situation should talk to a family law attorney about whether a legal separation or divorce decree would change the analysis.

Does a separation agreement that gives me the house solve the problem?
Not under § 58.1-3211(2) as written. The opinion notes that some applicants had separation agreements making them sole owners of the property. The AG still concluded that as long as the parties were legally married, the spousal financial information had to be included.

What about my spouse's income?
Income is governed by a different subsection. Section 58.1-3211(1) considers the income of persons "residing in the dwelling." If a spouse is not residing in the dwelling, the spouse's income may not count toward the household income test. The opinion specifically draws this contrast between subsection (1) (residence-based, for income) and subsection (2) (status-based, for net worth).

Does Loudoun County have a higher net worth ceiling than other counties?
Yes. The opinion notes that Loudoun is among the localities authorized to raise the net combined financial worth limit to $540,000 under § 58.1-3211(4). Other localities have lower ceilings.

What about extraordinary tax burden?
Section 58.1-3218 separately allows consideration of local conditions in determining whether a homeowner bears "an extraordinary tax burden" relative to income and financial worth. That's a different analysis, but the AG flagged it as preserved.

Background and statutory framework

Article X, § 6(b) of the Constitution of Virginia (at the time) authorized the General Assembly to enact laws permitting localities to exempt real estate and personal property of persons over 65 or permanently and totally disabled who are "bearing an extraordinary tax burden" relative to income and financial worth. Section 58.1-3210 is the statutory implementation; § 58.1-3211 sets the financial caps.

Section 58.1-3211(2) (at the time) provided that "[t]he net combined financial worth, including the present value of all equitable interests . . . of the owners, and of the spouse of any owner . . . shall not exceed $200,000." Loudoun County was authorized to raise that ceiling to $540,000 under § 58.1-3211(4).

Section 58.1-3213(A) required applicants to submit an affidavit or other written statement accounting for total combined net worth, including the spouse's. Under § 58.1-3213(D), three paths exist to demonstrate disability, but disability and net worth are independent eligibility criteria.

Statutory construction principles: plain meaning controls when language is unambiguous (Commonwealth v. Gregory, 193 Va. 721 (1952)). Ambiguity exists "when the language is difficult to comprehend, is of doubtful import, or lacks clearness and definiteness" (Brown v. Lukhard, 229 Va. 316 (1985); Ayres v. Harleysville Mut. Cas. Co., 172 Va. 383 (1939)). Real estate tax exemptions are strictly construed against the applicant (DKM Richmond, 249 Va. 401 (1995); Westminster-Canterbury, 238 Va. 493 (1989)).

Citations

• Va. Code Ann. § 58.1-3210, § 58.1-3210(A)
• Va. Code Ann. § 58.1-3211, § 58.1-3211(1), § 58.1-3211(2), § 58.1-3211(4)
• Va. Code Ann. § 58.1-3213(A)
• Va. Code Ann. § 58.1-3218
• Va. Const. art. X, § 6(b), (f)
• Commonwealth v. Gregory, 193 Va. 721, 726, 71 S.E.2d 80, 83 (1952)
• Brown v. Lukhard, 229 Va. 316, 321, 330 S.E.2d 84, 87 (1985)
• Ayres v. Harleysville Mut. Cas. Co., 172 Va. 383, 393, 2 S.E.2d 303, 307 (1939)
• DKM Richmond Assoc., L.P. v. City of Richmond, 249 Va. 401, 407, 457 S.E.2d 76, 80 (1995)
• Westminster-Canterbury of Hampton Roads, Inc. v. City of Virginia Beach, 238 Va. 493, 501, 385 S.E.2d 561, 565 (1989)
• 2007 Op. Va. Att'y Gen. 129, 131
• 1994 Op. Va. Att'y Gen. 117, 119
• 1998 Op. Va. Att'y Gen. 127, 127

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2010/10-062-Wertz.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

November 5, 2010

900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

The Honorable Robert S. Wertz, Jr.
Commissioner of the Revenue for Loudoun County
P.O. Box 8000
Leesburg, Virginia 20177-9804

Dear Commissioner Wertz:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You ask whether a married person, applying for a real property tax exemption authorized by § 58.1-3210, must include his or her spouse's net worth when calculating net combined financial worth to satisfy the condition set forth in § 58.1-3211(2) if the spouse's name does not appear on the deed to property and such spouse either has separated from or abandoned the applicant.

Response

It is my opinion that a married person applying for a real property tax exemption authorized by § 58.1-3210 must report both the applicant's net worth and his or her spouse's net worth to determine net combined financial worth as required by § 58.1-3211(2) irrespective of whether such spouse has separated from or abandoned the applicant or whether the spouse's name appears on the deed.

Background

You state that a number of your constituents apply for real property tax exemptions under a tax relief program offered by Loudoun County pursuant to § 58.1-3210. You further state that some applicants object to the inclusion of their spouse's financial information in determining net worth when a spouse either has separated from or abandoned the applicant. In some cases of separation or abandonment, the applicants are unable to account for the whereabouts or financial information of their spouses. You further state that some of the parties have separation agreements granting ownership of the property at issue to the spouse applying for the tax exemption. In other cases, the non-applying spouse never was listed on the deed to the property.

Applicable Law and Discussion

Article X, § 6(b) of the Constitution of Virginia authorizes the General Assembly to enact laws permitting local governing bodies to provide an exemption for

local property taxation, or a portion thereof, within such restrictions and upon such conditions as may be prescribed, of real estate and personal property designed for continuous habitation owned by, and occupied as the sole dwelling of, persons not less than sixty-five years of age or persons permanently and totally disabled as established by general law who are deemed by the General Assembly to be bearing an extraordinary tax burden on said property in relation to their income and financial worth.[1]

Pursuant to this authority, the General Assembly enacted § 58.1-3210, which authorizes localities to implement tax-relief programs for those persons who are at least sixty-five years of age or who are permanently and totally disabled.[2] Such exemptions, however, are not without limitation. Section 58.1-3211 imposes certain restrictions, providing, in pertinent part, that "[t]he net combined financial worth, including the present value of all equitable interests . . . of the owners, and of the spouse of any owner . . . shall not exceed $200,000."[3] Thus, persons seeking an exemption must submit an affidavit or other written statement accounting for the total combined net worth, including that of his or her spouse.[4]

Where, as here, the language of a statute is unambiguous, its plain meaning is to be applied.[5] An ambiguity exists "when the language is difficult to comprehend, is of doubtful import, or lacks clearness and definiteness."[6] Additionally, real estate tax exemptions must be strictly construed against the applicant seeking the exemption.[7]

Section 58.1-3211(2) clearly indicates that an applicant's "net combined financial worth" includes the "value of all equitable interests . . . of the owners, and of the spouse of any owner." The statute does not require that the spouse of an owner also be an owner or be named on the deed or that the spouses live together. Unlike the income restrictions of § 58.1-3211(1), which considers the income of those persons residing in the dwelling, § 58.1-3211(2) makes no mention of living arrangements. Rather, applicants are required to report the net combined financial worth "of the owners, and of the spouse of any owner."[8]

Therefore, when a married person seeks to qualify for a tax exemption authorized by § 58.1-3210, so long as the couple remains legally married and notwithstanding legal title to the home and/or a separation of the spouses, the spousal relationship remains, and the finances of the applicant's spouse must be included in the calculation to determine net combined financial worth under the statute.

Conclusion

Accordingly, it is my opinion that a married person applying for a real property tax exemption authorized by § 58.1-3210 must report both the applicant's net worth and his or her spouse's net worth to determine net combined financial worth as required by § 58.1-3211(2) irrespective of whether such spouse has separated from or abandoned the applicant or whether the spouse's name appears on the deed.

With warmest regards, I am

Very truly yours,

Kenneth T. Cuccinelli, II
Attorney General

[1] VA. CONST. art. X, § 6(b). I note that Virginia voters will consider a ballot question on November 2, 2010, regarding whether this constitutional provision should be amended. If adopted, this amendment would strike the current limitation for this tax exemption to qualifying persons who bear "an extraordinary tax burden" and authorize the General Assembly to permit local governing bodies to determine their own income and/or financial worth limitations for such tax exemptions.

[2] VA. CODE ANN. § 58.1-3210(A) (2009).

[3] Section 58.1-3211(2) (2009). It should also be noted that Loudoun County is permitted to raise the net combined financial worth limit to a maximum of $540,000. Section 58.1-3211(4) (2009).

[4] Section 58.1-3213(A) (2009).

[5] See Commonwealth v. Gregory, 193 Va. 721, 726, 71 S.E.2d 80, 83 (1952) ("where a statute is simple and plain and no ambiguity exists courts are bound to follow the law as written.").

[6] Brown v. Lukhard, 229 Va. 316, 321, 330 S.E.2d 84, 87 (1985) (citing Ayres v. Harleysville Mut. Cas. Co., 172 Va. 383, 393, 2 S.E.2d 303, 307 (1939)).

[7] VA. CONST. art X, § 6(f). See DKM Richmond Assoc., L.P. v. City of Richmond, 249 Va. 401, 407, 457 S.E.2d 76, 80 (1995) ("the general policy is to tax all property ... the taxpayer has the burden to establish that it comes within the terms of the exemption"); Westminster-Canterbury of Hampton Roads, Inc. v. City of Virginia Beach, 238 Va. 493, 501, 385 S.E.2d 561, 565 (1989) ("'exemption from taxation is the exception, and where there is any doubt, the doubt is resolved against the one claiming exemption'"). See also 2007 Op. Va. Att'y Gen. 129, 131; 1994 Op. Va. Att'y Gen. 117, 119; 1998 Op. Va. Att'y Gen. 127, 127 (exemptions under § 58.1-3210 must be strictly construed).

[8] Section 58.1-3211(2) (italics added).