|Click here to pay real estate taxes online|
There is a fixed rate of 2.5% added to all credit card transactions and a flat fee of $2.25 for ACH payments.
The convenience fee is collected by a third party payment processor and is non-refundable. For your payment of taxes to be considered timely, you must complete the transaction by midnight on the tax due date. Partial payments on personal property tax are accepted. However, please be aware that payments on past due taxes are applied to penalty and interest first. All payments will be applied to the oldest balances first.
Why is there a convenience fee to pay online?
Many people wonder why there is a fee to pay tax bills online. The City has been moving in the direction of absorbing credit card fees for all transactions for quite some time now. For all service and product based transaction the City does absorb the cost of the transaction as a cost of doing business. For example, the City absorbs the cost of buying a trash decal, signing up for a parks and rec class, buying something at a warehouse sale, or a large item trash pickup, etc.
The main issue with taxes is the cost of the transactions. In fiscal year 2013, Real Estate and Personal Property Taxes account for almost $60 Million in revenue. The City just can’t afford to lose 2-3% of each transaction. Even with a low adoption rate, the cost could easily run into a six figure bill. Most people would prefer to spend the money on services like schools, roads, and public safety, instead of being able to pay their bill by credit card at no cost.
There are also some legal issues as well. The Treasurer is required to collect the full amount of the levied tax by state code. Absorbing credit card fees would result in collecting less than the amount of the tax levy. It would also mean that the vast majority of people who pay by mortgage escrow or check would effectively be subsidizing the tax bill of those who pay by credit card, resulting in a slightly higher tax rate.
We do offer a no-cost electronic payment solution though, called our Automated Payment Plan. This is a direct debit on the due date for the amount of the tax bill. Customers receive an email reminder before the deadline, and the bill reflects that the account is enrolled in the program. More information can be found here: http://www.charlottesville.org/Index.aspx?page=2785
Additionally, we renegotiated our contract in 2012 with our online vendor to bring those credit card fees for customers down even further, locking in a fixed rate regardless of the transaction amount, and savings citizens an average of 25% per transaction.
Charlottesville has been very progressive in the area, most localities do not absorb any credit card fees, and we are not aware of any that do for taxes because of the issues mentioned above.