Virginia’s real estate transfer tax has two main pieces at the state level: a recordation tax of $0.25 per $100 charged when the deed is recorded, and a grantor tax of $0.50 per $500 charged on the sale itself. Financed buyers owe a second recordation tax on the deed of trust, most localities add their own recordation tax, and properties in Northern Virginia and Hampton Roads carry regional fees on top. For a $500,000 home, the state-level pieces alone start at $1,750 before any of the local and regional add-ons.
The Two State Taxes on Every Sale
Every deed recorded in Virginia triggers a state recordation tax at $0.25 for each $100 of the purchase price or the property’s assessed value, whichever is greater.1Virginia Code Commission. Virginia Code 58.1-801 – Deeds Generally; Charter Amendments On a $400,000 sale that comes to $1,000. The clerk of the circuit court in the jurisdiction where the property sits collects it before recording the deed.
One wrinkle catches people off guard. “Value of the property conveyed” means the most recent local property tax assessment, not an independent appraisal.1Virginia Code Commission. Virginia Code 58.1-801 – Deeds Generally; Charter Amendments In an arms-length sale the price usually exceeds the assessment, so the tax is based on the price. In below-market transfers between family members or related parties, the assessed value can control and produce a higher tax than the parties expected.
On top of recordation, every sale carries a grantor tax of $0.50 for each $500 of the price or value, whichever is greater.2Virginia Code Commission. Virginia Code 58.1-802 – Additional Tax Paid by Grantor; Collection That works out to $0.10 per $100, or $1 per $1,000 of value. A $400,000 sale produces a $400 grantor tax.
The grantor tax statute calculates the amount “exclusive of the value of any lien or encumbrance remaining thereon at the time of the sale.”2Virginia Code Commission. Virginia Code 58.1-802 – Additional Tax Paid by Grantor; Collection That exclusion only matters when the buyer assumes an existing mortgage or takes the property subject to it. In a typical sale, the seller’s loan gets paid off at closing and no lien remains, so the full sale price is taxable.
Recordation Tax on the Mortgage
Buyers who finance pay a separate recordation tax when the lender’s deed of trust is recorded. The rate is the same $0.25 per $100, but it applies to the loan amount rather than the sale price.3Virginia Code Commission. Virginia Code 58.1-803 – Deeds of Trust or Mortgages; Maximum Tax A buyer with a $400,000 mortgage pays $1,000 in recordation tax on the deed of trust in addition to the recordation tax on the deed itself.
For a home equity line of credit or other revolving deed of trust, the tax is calculated on the maximum credit limit, not the amount initially drawn. Refinancing gets a break: the rate drops to $0.18 per $100 on the first $10 million of refinanced debt, as long as the original deed of trust already had tax paid on it.3Virginia Code Commission. Virginia Code 58.1-803 – Deeds of Trust or Mortgages; Maximum Tax On a $400,000 residential refinance, that reduced rate saves $280 compared to the standard rate.
Local Recordation Tax
Virginia law authorizes every city and county to add a local recordation tax of up to one-third of the state rate.4Virginia Code Commission. Virginia Code 58.1-814 – City or County Recordation Tax Most Virginia localities do. The local rate works out to roughly $0.083 per $100 of value, and it applies to both the deed and any deed of trust being recorded.5City of Alexandria, VA. Recordation Tax
On a $500,000 purchase with a $400,000 mortgage, the local recordation tax adds roughly $417 on the deed and $333 on the mortgage. These amounts show up on the settlement statement and have to be paid before the clerk will record anything.
Regional Fees by Location
Three separate regional fees apply in different parts of the state, each stacking on top of the state and local taxes.
WMATA Capital Fee in Northern Virginia
The WMATA capital fee applies to every sale in a county or city that belongs to the Northern Virginia Transportation Authority. The rate is $0.10 per $100 of value, calculated the same way as the grantor tax and excluding any liens that remain on the property after closing.6Virginia Code Commission. Virginia Code 58.1-802.3 – Regional Transportation Improvement Fee Revenue funds the Washington Metropolitan Area Transit Authority’s capital needs. On a $500,000 sale, the fee is $500.
Regional Congestion Relief Fee
A second fee, also at $0.10 per $100, applies in qualifying planning districts that meet specific population and transit-ridership thresholds.7Virginia Code Commission. Virginia Code 58.1-802.4 – Regional Congestion Relief Fee In practice that means Planning District 8 in Northern Virginia. Sellers in that region pay both the WMATA capital fee and the congestion relief fee, a combined $0.20 per $100 in regional charges on top of the state grantor tax. On a $500,000 sale, the two regional fees together add $1,000.
Hampton Roads Transportation Fee
Properties in the Hampton Roads transportation district carry a regional transportation improvement fee of $0.06 per $100.8Virginia Code Commission. Virginia Code 58.1-802.5 – Regional Transportation Improvement Fee That’s lower than the Northern Virginia charges but still adds $300 to a $500,000 sale. Properties outside Northern Virginia and Hampton Roads pay only the base state taxes and any applicable local recordation tax.
What the Total Looks Like
On a $500,000 sale in Northern Virginia with a $400,000 mortgage, assuming the locality imposes the full local recordation tax, the pieces come together like this:
- State recordation tax on the deed: $1,250
- Grantor tax: $500
- WMATA capital fee: $500
- Congestion relief fee: $500
- State recordation tax on the mortgage: $1,000
- Local recordation tax on the deed: approximately $417
- Local recordation tax on the mortgage: approximately $333
The combined total across both parties lands at roughly $4,500, well above the $1,750 in state-level transfer taxes alone. Hampton Roads totals come in lower because of the smaller regional fee, and less-populated parts of the state carry only the base state taxes and the local recordation tax.
Who Pays Which Tax
Virginia’s default allocation splits the taxes by type. The seller pays the grantor tax because the statute imposes that assessment on the person conveying the property.2Virginia Code Commission. Virginia Code 58.1-802 – Additional Tax Paid by Grantor; Collection The regional fees under §§ 58.1-802.3, 58.1-802.4, and 58.1-802.5 follow the same structure and fall on the seller by default.
The buyer customarily pays the state recordation tax on the deed and always pays the recordation tax on their mortgage, along with any local recordation taxes on both instruments. Those costs appear as line items in the buyer’s closing costs.
The statute lets the parties negotiate a different split. The grantor and grantee may agree that the buyer will cover all or part of the grantor tax.2Virginia Code Commission. Virginia Code 58.1-802 – Additional Tax Paid by Grantor; Collection In competitive markets, sellers sometimes insist that buyers absorb a share of the seller’s transfer taxes as a condition of the deal. If the purchase contract is silent, the closing agent applies the default allocation.
Common Exemptions
Virginia Code § 58.1-811 exempts certain categories of transfers from the recordation tax, the grantor tax, and the regional fees. The ones that come up most often:
- Deeds transferring property under a divorce decree, a separate maintenance order, or a written separation agreement are exempt. The exemption does not cover general transfers between spouses who are not divorcing or separating.9Virginia Code Commission. Virginia Code 58.1-811 – Exemptions
- Transferring property to a revocable living trust where the grantor and the trust beneficiaries are the same person is exempt, provided no money changes hands.9Virginia Code Commission. Virginia Code 58.1-811 – Exemptions
- Deeds conveying property to or from the United States, the Commonwealth, or any Virginia city, county, town, or political subdivision are exempt.9Virginia Code Commission. Virginia Code 58.1-811 – Exemptions
- Mergers, consolidations, and transfers between a parent corporation and its subsidiary that qualify for nonrecognition under the Internal Revenue Code are exempt. This covers corporate parent-subsidiary relationships, not transfers between parents and children in a family.9Virginia Code Commission. Virginia Code 58.1-811 – Exemptions
Gifts of real estate with no consideration may avoid the grantor tax, since that tax is imposed on sales. The recordation tax still applies, though, because it is based on either the consideration or the assessed value, whichever is greater. A gift with zero consideration is still taxed on the property’s assessed value.1Virginia Code Commission. Virginia Code 58.1-801 – Deeds Generally; Charter Amendments Transfers between family members outside of divorce, including from parents to children, do not qualify for a general exemption under current Virginia law.