The Virginia grantor tax is a state transfer tax the seller owes when real property changes hands, charged at $0.50 for every $500 of the sale price (or any fraction of $500) once the consideration exceeds $100.1Virginia Code Commission. Virginia Code Title 58.1 Taxation 58.1-802 Sellers in Northern Virginia and Hampton Roads pay an additional regional fee on top of that base rate. The tax is collected by the Clerk of the Circuit Court at recording, and the deed will not be recorded until it is paid.
How to Calculate What You’ll Owe
The base rate under Virginia Code § 58.1-802 is $0.50 per $500 of consideration, calculated on the sale price minus any liens or encumbrances that remain on the property at closing.1Virginia Code Commission. Virginia Code Title 58.1 Taxation 58.1-802
The arithmetic is simple. Divide the net taxable amount by $500, round up to the next whole number, and multiply by $0.50. A $400,000 home with no assumed liens works out to 800 units at $0.50, or $400 in grantor tax. Sell for $400,250 and you round up to 801 units, making the tax $400.50. Even a single dollar over a $500 increment pushes you into the next unit.1Virginia Code Commission. Virginia Code Title 58.1 Taxation 58.1-802
One rule catches family sales off guard: the tax is calculated on consideration or fair market value, whichever is greater. Sell a property worth $350,000 to a relative for $200,000, and the tax still runs on the $350,000 figure. Misrepresenting the value on the deed to shrink the tax exposes the parties to reassessment and penalties under § 58.1-812.2Virginia Code Commission. Virginia Code 58.1-812 – Payment Prerequisite to Recordation; Exceptions; Assessment and Collection of Tax; Penalty for Misrepresentation
Regional Surcharges in Northern Virginia and Hampton Roads
If your property is in one of two metro regions, an additional fee applies on top of the base grantor tax.
Northern Virginia sellers pay a regional transportation improvement fee of $0.15 per $100 of value under Virginia Code § 58.1-802.3, which funds regional transit including the WMATA Capital Fund. On a $600,000 sale, that adds $900 on top of the $600 base grantor tax.
Hampton Roads sellers pay a regional congestion relief fee of $0.10 per $100 of value under Virginia Code § 58.1-802.4. That same $600,000 sale would carry a $600 regional surcharge.3Virginia Code Commission. Virginia Code 58.1-802.4 – Regional Congestion Relief Fee
Both regional fees use the same valuation rule as the base tax: the greater of consideration or fair market value, minus remaining liens. Sellers outside these two regions pay only the base state rate.
Grantor Tax Is Not the Recordation Tax
Virginia charges two separate transfer taxes at closing, and sellers routinely confuse them. The grantor tax under § 58.1-802 is the seller’s obligation. The recordation tax under § 58.1-801 is a separate levy of $0.25 per $100 of value that traditionally falls on the buyer. Both must be paid before the clerk records the deed, and both appear as distinct line items on the settlement statement.
Who actually cuts the check is negotiable. Purchase contracts often shift some or all of one tax to the other party. The statutory labels describe the default legal obligation, not the outcome after negotiation.
Common Exemptions
Virginia Code § 58.1-811 lists more than two dozen exempt transfers. The ones homeowners encounter most often:
- Deeds of gift where no consideration passes between the parties, provided the deed clearly states it is a gift.
- Transfers between spouses, including deeds arising from a divorce decree or separation agreement.
- Transfers into or out of a revocable trust where beneficial ownership does not change and no consideration is paid.
- Property passing through a will or by operation of law when the owner dies.
To claim any exemption, the deed itself must cite the specific subsection of § 58.1-811 when it is presented for recording. Clerks reject deeds that claim an exemption without the statutory citation. Settlement agents usually handle this language during deed preparation, but confirm it is there before closing if you are relying on an exemption.
Federal Tax Effect for Sellers
The grantor tax is not directly deductible on your federal return, but it is treated as a selling expense that reduces the “amount realized” on the sale.4Internal Revenue Service. Publication 523, Selling Your Home Sell for $500,000 and pay $500 in grantor tax plus a $750 regional surcharge, and your amount realized drops to $498,750 before you calculate gain or loss. On a home close to the $250,000 individual (or $500,000 joint) capital gains exclusion, every dollar of selling expense counts.
Payment at Recording
The Clerk of the Circuit Court in the jurisdiction where the property sits collects the grantor tax when the deed is presented for recording. Virginia law is direct: no deed will be admitted to record without payment of all taxes imposed on it.2Virginia Code Commission. Virginia Code 58.1-812 – Payment Prerequisite to Recordation; Exceptions; Assessment and Collection of Tax; Penalty for Misrepresentation
In a normal residential closing, the settlement agent bundles the grantor tax with the recordation tax and recording fees into a single payment to the clerk on the seller’s behalf, and the amount appears on the settlement statement as a seller-side charge. Your practical job is to review that statement before closing so the base tax, any regional surcharge, and any exemption claim line up with the deal you actually made.