Many borrowers want to know how much Virginia charges in recordation tax at closing. They are concerned that an unexpected tax may affect their Virginia home loan review. This guide explains what lenders may look for so you can move forward with confidence.
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How Much Is the Recordation Tax in Virginia?
SHORT ANSWER
Virginia charges 2 recordation taxes at a home purchase, 1 on the deed and 1 on the mortgage. Both run $0.25 per $100, plus a local add-on of one third of the state amount. The seller owes a separate grantor’s tax by law. Smart Loan Savings Educational Content
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| Virginia Recordation Tax Factor | Virginia Rate or Rule |
|---|---|
| Virginia deed recordation tax rate | $0.25 per $100 |
| Virginia mortgage recordation tax rate | $0.25 per $100 |
| Basis for the Virginia mortgage tax | The loan amount |
| Basis for the Virginia deed tax | Price or value, whichever is higher |
| Virginia local recordation tax add-on | One third of the state amount |
| Virginia grantor’s tax rate | $0.50 per $500 |
| Who owes the Virginia grantor’s tax by law | The seller |
| How Virginia splits the grantor’s tax | Evenly between state and locality |
| Virginia recordation tax on a home equity line | Based on the full credit limit |
| Virginia recordation tax when a construction loan converts | None, if the amount is unchanged |
| Virginia recordation tax on a deed of gift | None |
| Virginia recordation tax on a divorce transfer | None |
| When the Virginia clerk records the deed | After the tax is paid |
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| Virginia Recordation Tax Deep Dive | Underwriting Impact on Your Virginia Home Loan Profile |
|---|---|
| Virginia Taxes Two Documents, Not One | Virginia taxes 2 documents at a purchase closing. Buyers usually budget for only 1. The deed is taxed at $0.25 per $100 of the price or the property’s value, whichever is higher. The deed of trust, which is the mortgage, is taxed at $0.25 per $100 of the loan amount. On a $400,000 home with a $360,000 loan, the deed tax is $1,000. The mortgage tax is $900. The Virginia Mortgage Guide covers the other local factors that shape a home loan file in the state. |
| The Local Share and the Seller’s Tax | Each of those state taxes has a local companion. A city or county may add a recordation tax equal to one third of the state amount. That turns the $1,000 deed tax into about $1,333. It turns the $900 mortgage tax into about $1,200. Virginia also charges a grantor’s tax of $0.50 per $500 on the greater of the price or the property’s value. That tax is the seller’s by law, not the buyer’s. The state and the locality split it evenly. |
| Why Your Down Payment Changes the Tax | Here is the part that surprises people. Virginia’s recordation tax on the mortgage runs on the loan amount, not the purchase price. Your down payment changes the tax. On that same $400,000 home, a buyer putting 10% down borrows $360,000 and owes $900 in state mortgage tax. A buyer putting 20% down borrows $320,000 and owes $800. The larger down payment saves $100 in tax on top of everything else it saves. |
| Virginia Transfers That Carry No Tax | Some Virginia transfers carry no recordation tax at all. A deed of gift pays none. So does a quitclaim deed where no money changes hands between the parties. A deed transferring property under a divorce decree is also exempt. So is a deed transferring property under a written agreement tied to a divorce or separation. A deed of partition dividing property among people who already co-own it is exempt as well. Each of these has to say on its face what it is. That lets the clerk apply the exemption. |
| How a Home Equity Line Is Taxed | A home equity line is taxed differently. The difference costs money. On an open or revolving deed of trust, Virginia calculates the tax on the maximum amount that may be outstanding at any one time. It does not calculate on what you actually draw. A $100,000 credit line is taxed as $100,000 even if you do not draw a dollar of it. That works out to $250 in state tax plus the local third, on a line you may only open as a safety net. |
| Building Instead of Buying | Building rather than buying changes the timing of the tax. A construction loan deed of trust can convert to permanent financing with no new recordation tax. 3 conditions apply. The same people have to be on the new loan document. The amount cannot increase. The tax has to have been paid already on the construction deed of trust. Add to the loan amount at conversion and the tax applies to the increase. Construction Home Loan Explained covers how the 2 phases work, and this page covers only the Virginia tax piece. |
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| What Lenders Check | How Virginia Recordation Tax Rules Affect Your Loan File |
|---|---|
| Your Cash to Close Figure | Both recordation taxes are part of the money you bring to closing. They sit separate from your down payment. A file built on a standard closing cost estimate can fall short, because Virginia charges on the deed and on the mortgage. |
| How Your Down Payment Changes the Tax | The mortgage tax runs on the loan amount. A smaller down payment means a larger loan, which means a larger tax. That works against the usual instinct to keep as much cash on hand as possible. |
| Who Pays What in Your Contract | Virginia law puts the grantor’s tax on the seller. It does not assign the recordation taxes. Your purchase contract decides who carries those. Read that line before you sign it. |
| A Home Equity Line on the Same Property | A credit line is taxed on its full limit, not on what you draw. Opening a larger line than you need raises the tax at recording with no benefit unless you use the money. |
| Recording at the Clerk’s Office | The clerk will not record the deed until the tax is paid. The clerk does not care which party pays it. An unresolved tax question stops the recording rather than delaying it quietly. |
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| People Also Ask | Why These Questions Matter |
|---|---|
| Who pays the recordation tax in Virginia? | Virginia law places the grantor’s tax on the seller, and leaves the 2 recordation taxes to be assigned in the purchase contract. In Virginia practice the buyer commonly carries the recordation taxes on both the deed and the mortgage. Every line of a closing statement is negotiable. |
| What is the grantor’s tax in Virginia? | The Virginia grantor’s tax runs $0.50 per $500 of the price or the property’s value, whichever is greater, excluding any lien left in place at the sale. Virginia law puts the grantor’s tax on the seller, and the state and the locality split the money evenly. |
| How does Virginia tax a home equity line? | Virginia taxes a home equity line on the maximum amount that may be outstanding at any one time, not on the balance actually drawn. A $100,000 credit line is taxed as though the full $100,000 were borrowed, which comes to $250 in state recordation tax plus the local share. |
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| Sources Used on This Page |
| Code of Virginia — § 58.1-801 recordation tax on deeds | § 58.1-802 additional tax paid by grantor | § 58.1-803 deeds of trust or mortgages and maximum tax | § 58.1-811 exemptions | § 58.1-814 local recordation tax | Virginia Administrative Code, Title 23, Agency 10, Chapter 320, Recordation Tax Regulations | Virginia Department of Taxation — Rulings of the Tax Commissioner on recordation and grantor’s tax |
| Disclaimer |
| Virginia recordation and grantor’s tax rates are set by state law and by each city or county, and are subject to change. Some Northern Virginia and Hampton Roads localities charge additional regional fees not covered here. Who pays each item is set by your purchase contract. This page is provided for educational purposes only. Smart Loan Savings Educational Content |