Virginia Form R-5: Filing the Nonresident Real Property Owner Registration

Virginia Form R-5, the Nonresident Real Property Owner Registration, is the form you file when you live outside Virginia and either rent out or sell real property located in the state. You rarely mail it yourself: the broker, settlement agent, or property management firm handling the transaction collects your completed form and forwards it to the Virginia Department of Taxation at P.O. Box 2390, Richmond, VA 23218-2390.¹ Your job is to give them accurate information in time for them to meet the state’s deadline.

Who Has to File One

The form is required of any nonresident payee receiving money from Virginia real property. That covers individuals who are not Virginia residents, nonresident estates and trusts, partnerships and S corporations with nonresident partners or shareholders, and corporations not organized under Virginia law.²

For rentals, the trigger is $600 or more in gross annual payments from the property. Brokers, realtors, and property managers are required to request the form from each nonresident owner who meets that threshold.¹

For sales, the trigger is the transfer itself. The dollar amount does not matter. The real estate reporting person (typically the settlement agent or closing attorney, as defined by Internal Revenue Code § 6045(e)) must collect your completed Form R-5 at or before closing.²

When Form R-5E Takes the Place of R-5

Some transactions are exempt. In those cases you complete Form R-5E, the Nonresident Real Property Owner Exemption Certificate, and the broker or reporting person keeps it on file instead of sending a registration to the Department of Taxation. The form itself tells you not to complete R-5 if an R-5E exemption applies.

The exemption covers rentals under $600 in gross annual payments. For sales, the exempt categories are:³

Principal residence gain excluded under IRC § 121 (up to $250,000, or $500,000 on a joint return).
Like-kind exchanges under IRC § 1031.
Involuntary conversions deferred under IRC §§ 1033 and 1034.
Tax-free gifts or inheritances under IRC § 102.
Tax-free contributions of property for a partnership interest (IRC § 721) or corporate stock (IRC § 351).
Transfers made as part of a tax-free corporate reorganization.
Any other transaction not subject to federal or Virginia income tax, with a written explanation attached.

Raise the exemption with your settlement agent or property manager before closing so they have the completed R-5E in their file.

Filling Out the Five Parts

Have your deed and your own tax records in front of you. Most of the entries come straight from them.

Part I: Nonresident Payee Information

Enter your Social Security Number, Federal Employer Identification Number, or Virginia Business Account Number, followed by your full legal name and current mailing address. If the owner is a trust, add the trust name and the fiduciary’s name and title. Partnerships, S corporations, estates, and trusts with nonresident partners, shareholders, or beneficiaries must attach Form R-5P (or a substitute schedule in the same format) listing each nonresident’s identifying information.

Part II: Type of Entity

Check one box: Individual, Trust/Estate, LLC, C-Corporation, Partnership, or S-Corporation. If you plan to file a unified individual income tax return for nonresident shareholders or partners, check that separate box and enter the number of partners, shareholders, or beneficiaries.

Part III: Property Information

Provide the property’s legal description, street address, city or county, and ZIP code, all matching the deed. Check the box for property type (Residential, Commercial, Agricultural, or Other with a description). For a sale, there is a separate line for how you used the property immediately before the sale: primary residence, secondary or vacation residence, leased or rented to a third party, or other.

Part IV: Sales and Rentals

This section splits based on the transaction:

For a rental, enter the average gross monthly rental income and the date you first placed the property in service as a rental.
For a sale, enter the gross proceeds, the closing date, and, if it is an installment sale, the dates payments begin and end.

Part V: Broker or Real Estate Reporting Person

Enter the name, address, and tax identification number of the broker, settlement agent, closing attorney, or property management firm. The Department of Taxation uses this information to follow up if anything on the form needs clarification.

Sign and date the declaration beneath Part V. You are affirming the information is true and complete under penalties provided by law. The form notes that no one may charge you more than $10 to complete it.

Where and When It Gets Filed

The broker or real estate reporting person submits the form to:

Department of Taxation
P.O. Box 2390
Richmond, VA 23218-2390

The form is available at www.tax.virginia.gov. For questions, you can write to the Office of Customer Services at P.O. Box 1115, Richmond, VA 23218-1115 or call 804-367-8031.

Deadlines run from the broker’s side, not yours:¹

For a sale, the form is due by the 15th day of the month after closing.
For a rental, it is due by the 15th day of the month after the broker receives it from you.

If you do not return a completed form within 60 days of being asked (for a rental) or by the time of closing (for a sale), the broker is required to complete one on your behalf using whatever they have in their files.¹ An incomplete form filed in your name is a bad starting point for your Virginia tax account, so hand yours in on time.

Penalties If Something Goes Wrong

Two separate penalties exist, and they fall on different people.

A broker or reporting person who misses the filing deadline faces a $50 penalty for each month the form remains unfiled, capped at six months, for a maximum of $300.² That is the broker’s penalty, not yours, which is why settlement agents will not close without the form in hand.

The criminal provision targets dishonesty rather than lateness. A nonresident who willfully provides false or fraudulent information to avoid Virginia income taxes on a property transfer commits a Class 1 misdemeanor. The same charge applies to a reporting person who knows the information is false and fails to notify the Department of Taxation.² A Class 1 misdemeanor in Virginia carries up to 12 months in jail, a fine of up to $2,500, or both.⁴

Keeping the Registration Current

If your mailing address, property manager, or entity structure changes after you register, send updated information to the same P.O. Box 2390 address. An outdated address means tax notices go to the wrong place, and you will not get an extension because a letter did not reach you. A change of broker or property management firm also matters, because Part V tells the state who to contact about your property. There is no separate change-of-information form; submitting a new R-5 with corrected details handles the update.

1
Virginia Tax. Registration of Nonresident Property Owners
2
Virginia Code Commission. Virginia Code 58.1-317 – Filing of Estimated Tax by Nonresidents Upon the Sale of Real Property; Penalties
3
Virginia Department of Taxation. Nonresident Real Property Owner Exemption Certificate (Form R-5E)
4
Virginia Code Commission. Virginia Code 18.2-11 – Punishment for Conviction of Misdemeanor