LYNCHBURG, Va. – In a move aimed at providing financial relief to residents, Lynchburg City Council is considering a bold proposal that would eliminate the personal property tax, commonly called the “car tax,” for vehicles valued under $20,000.
If passed, Lynchburg would become the first locality in Virginia to eliminate the car tax for vehicles under a certain value.
The “No Car Tax Plan” is part of the proposed 2026 budget and which council members say would impact an estimated 45,500 vehicles in Lynchburg. Currently, the tax sits at $1.025 per $100 of assessed value.
Under the proposed plan, that rate would drop to zero for lower-value vehicles, many owned by students, working families, and young professionals. Yet most residents we interviewed weren’t aware of the proposal.
“I have not a clue, no,” admitted Lynchburg resident Maxwell Krieger when first asked if he knew about the plan.
“I do not,” echoed Gabrielle Green, another resident.
But once the plan was explained, the support was personal.
“I just graduated with my master’s degree and I moved into a new place,” Krieger said. “So, paying rent and all of my student loans is definitely a crunch. Saving a little bit of money with that tax relief would definitely help me for sure. I own a 2015 Ford Edge that I bought probably two and a half years ago, and I purchased it for less than $20,000 and it’s definitely depreciated in value since then, so that tax break would apply to me.”
Gabrielle Green echoed the sentiment.
“I think it’s a good idea because especially if it is an older car, then I know with my car I do have a lot of issues with it,” she said. “So having to keep paying a lot of money on it for something that probably isn’t going to last much longer is not really ideal.”
For cars valued over $20,000, the tax wouldn’t go away entirely, but the rate would drop, easing the burden on higher-end vehicle owners without eliminating revenue completely.
Still, critics raise concerns about the plan’s impact on the city’s budget. To offset the loss in car tax revenue, council members are considering an increase in the real estate tax rate, a move that has already sparked debate.
“If they have to tax something else, they should figure out some better ways of doing that rather than just shifting the taxes to the same people,” said Lynchburg residents Bob and Tammy Richardson.
Proposals like this haven’t had much luck in the past. Even Governor Glenn Youngkin has tried twice, unsuccessfully, to repeal the car tax at the state level.
City Council is expected to vote on the proposal and the final FY26 budget next Tuesday.