Does Virginia have a real estate transfer tax?
Yes, though Virginia doesn’t call it that. Chapter 8 of Title 58.1 imposes taxes on recording deeds, and three of them add up to what other states call a transfer tax.
The state recordation tax under Va. Code § 58.1-801 is 25 cents on every $100, or fraction of $100, of the greater of the consideration or the property’s value. It is flat. There are no tiers for larger sales and no cap.
The grantor tax under § 58.1-802 is 50 cents for each $500, or fraction of $500, which works out to 0.1%. It applies once the consideration or value exceeds $100.
Then § 58.1-814 lets any city or county add its own recordation tax equal to one-third of the state recordation tax. That is about 0.0833% of the price, collected by the circuit court clerk with the state tax.
| Tax | Rate | Statute | Customary payer |
|---|---|---|---|
| State recordation tax | $0.25 per $100 (0.25%) | § 58.1-801 | Buyer |
| Local recordation tax | One-third of state tax (about 0.0833%) | § 58.1-814 | Buyer |
| Grantor tax | $0.50 per $500 (0.1%) | § 58.1-802 | Seller |
| Regional congestion relief fee (Northern Virginia) | $0.10 per $100 (0.1%) | § 58.1-802.3 | Seller |
| WMATA fee (Planning District 8) | $0.10 per $100 (0.1%) | § 58.1-802.4 | Seller |
| Hampton Roads regional fee | $0.06 per $100 (0.06%) | § 58.1-802.5 | Seller |
Who pays transfer tax in Virginia?
The statute puts the grantor tax on the seller: § 58.1-802 says it is paid by the grantor or whoever signs for the grantor. The same language appears in each regional fee. The parties may agree that the buyer pays some or all of it, and the purchase contract is where that happens.
Recordation tax isn’t assigned by § 58.1-801, so custom decides. In most Virginia sales the buyer pays the state and local recordation tax, because the buyer is the one recording the deed and usually a deed of trust as well. On a large apartment sale, expect the contract to spell this out line by line.
Everything is paid at the circuit court clerk’s office when the deed is recorded. Your settlement agent collects the amounts at closing and remits them with the deed.
Northern Virginia and Hampton Roads regional fees
Sellers in two regions pay more than the 0.1% grantor tax. In any county or city that belongs to the Northern Virginia Transportation Authority, § 58.1-802.3 adds a regional transportation improvement fee of $0.10 per $100. Section 58.1-802.4 adds another $0.10 per $100 in qualifying planning districts, with Planning District 8 named in the statute. Prince William County’s clerk lists both, as the Regional Congestion Relief Fee and the WMATA Fee.
That puts a Northern Virginia seller at 0.3% of price in grantor-side charges, three times what a seller in Roanoke pays.
In Hampton Roads, § 58.1-802.5 adds $0.06 per $100 for localities in a Hampton Roads transportation district. A seller there pays 0.16% in total.
All of these fees are figured on the same base as the grantor tax and are paid by the grantor unless the contract says otherwise.
Why assumed loans lower the seller’s side
Here is a feature most states don’t have. The grantor tax and each regional fee are computed on the consideration or value excluding any lien or encumbrance that stays on the property, whether the buyer assumes it or takes subject to it.
So if a buyer pays $2,000,000 for a building by assuming your $1,200,000 agency loan and paying $800,000 in cash, the grantor tax is figured on $800,000. That is $800 instead of $2,000, and in Northern Virginia each of the two regional fees drops from $2,000 to $800 as well. Recordation tax is still figured on the greater of consideration or value under § 58.1-801.
If an assumption is on the table anyway, ask your settlement agent to run the grantor tax both ways. In Northern Virginia, where three seller-side charges share the same base, the difference adds up quickly.
Transfers to and from your own LLC
Section 58.1-811 lists the exemptions, and subsection C carries most of the entity exemptions over to the grantor tax. Two are the ones investors use most.
A deed to a partnership or LLC is exempt from recordation tax when the grantors are entitled to receive at least 50% of the profits and surplus of the entity (subsection A 9). A deed from a partnership or LLC to its owners is exempt when the grantees are entitled to at least 50% (subsection A 10). Both carry an anti-abuse rule: the exemption is lost if the transfer is a precursor to, or follows, a transfer of control of the assets.
Other exemptions cover a new corporation formed by the people who control it, mergers and reorganizations into a surviving entity, parent and subsidiary transfers, and deeds to a revocable trust where the grantors and beneficiaries are the same people.
Virginia’s recordation and grantor taxes are tied to recording a deed. When an investor sells membership interests in the LLC that holds title, no deed is recorded, and Chapter 8 has no separate controlling interest tax. Have your settlement attorney confirm the structure before you rely on it.
Gifts, estates, foreclosures and 1031 exchanges
- Deeds of gift and quitclaim deeds with no consideration: no recordation tax under § 58.1-811 D, if the deed says so on its face.
- Deeds of distribution from an estate or trust: exempt when no consideration passes and the front page identifies the deed as a deed of distribution (§ 58.1-811 K).
- Foreclosure deeds and deeds in lieu: § 58.1-811 lists no exemption for them, so tax is figured on the consideration in the deed.
- 1031 exchanges: no exemption. The relinquished sale and the replacement purchase are each taxed in the normal way.
Worked example: a $2,000,000 and a $5,000,000 Virginia apartment sale
Take a 20-unit building in Prince William County selling for $2,000,000, with the buyer paying cash. State recordation tax is $2,000,000 ÷ $100 × $0.25 = $5,000. The county recordation tax is one-third of that, $1,666.67. The grantor tax is $2,000,000 ÷ $500 × $0.50 = $2,000. The Regional Congestion Relief Fee and the WMATA Fee are $2,000 each.
The total is $12,666.67. By custom, the buyer pays $6,666.67 of recordation tax and the seller pays $6,000. Move the same building to Richmond and the seller’s share falls to $2,000, since neither Northern Virginia fee applies. In a Hampton Roads locality it would be $3,200.
At $5,000,000, the state recordation tax is $12,500, local recordation is $4,166.67 and the grantor tax is $5,000. In Northern Virginia, each regional fee adds $5,000, for a total of $31,666.67 and a seller share of $15,000. Your settlement agent will add the clerk’s flat recording fees on top.
| Line item | $2,000,000 sale | $5,000,000 sale |
|---|---|---|
| State recordation tax (buyer) | $5,000.00 | $12,500.00 |
| Local recordation tax (buyer) | $1,666.67 | $4,166.67 |
| Grantor tax (seller) | $2,000.00 | $5,000.00 |
| Regional Congestion Relief Fee (seller, NoVA) | $2,000.00 | $5,000.00 |
| WMATA Fee (seller, NoVA) | $2,000.00 | $5,000.00 |
| Total in Prince William County | $12,666.67 | $31,666.67 |
| Seller share, Northern Virginia | $6,000.00 | $15,000.00 |
| Seller share, Hampton Roads | $3,200.00 | $8,000.00 |
| Seller share, elsewhere (grantor tax only) | $2,000.00 | $5,000.00 |
Virginia compared with neighboring states
Virginia is cheap for sellers outside its two transit regions and middle of the pack once you count the buyer’s recordation tax. Maryland’s state rate alone is 0.5% before county taxes are added, while Kentucky charges 0.1%.
The table compares state-level taxes on a $2,000,000 sale. Local transfer and recordation taxes in each state are left out except where noted.
| State | State-level rate | On a $2,000,000 sale |
|---|---|---|
| Virginia | 0.25% recordation + 0.1% grantor | $7,000 |
| Maryland | 0.5% state transfer tax | $10,000 |
| Tennessee | $0.37 per $100 | $7,400 |
| West Virginia | $1.10 per $500 plus county $0.55 to $1.65 per $500 | $6,600 to $11,000 |
| North Carolina | $1 per $500 | $4,000 |
| Kentucky | $0.50 per $500 | $2,000 |
Where transfer tax fits in your total selling costs
For most Virginia sellers the grantor tax is a rounding error next to income tax. Virginia taxes capital gains as ordinary income, so the profit on your building is hit by federal capital gains tax, depreciation recapture on the unrecaptured section 1250 gain at up to 25%, the 3.8% net investment income tax for many owners, and Virginia income tax.
A 1031 exchange can defer the federal and Virginia income tax but not the grantor tax or regional fees. If you are buying the replacement property in Virginia, you will usually pay recordation tax on that purchase too, so budget for both sides of the trade.
Selling your Virginia apartment building to Skyline
Skyline Capital Investments buys apartment buildings with five or more units throughout Virginia, from Northern Virginia to Hampton Roads and Richmond. We buy directly, can offer seller-carry terms, and work with 1031 timelines. We show you how recordation tax, grantor tax and any regional fees are expected to split in the contract, so your net figure is clear from the start.
Send the address and unit count through the form on this page, or call (469) 660-2977. We typically respond within 48 hours.
