Grantor tax
The grantor tax is Virginia's tax on a deed conveying real estate that was sold, at 50 cents for each $500 or fraction of the consideration or value, whichever is greater, once that exceeds $100 and excluding liens that remain. The seller pays it unless the parties arrange otherwise.
The clerk admits the deed only after the tax is certified paid
At the clerk's counter, a deed for land that was sold goes to record only when two things are on it: the amount of the consideration, stated on the first page, and the clerk's certification that the grantor tax has been paid.
The rule is Va. Code 58.1-802, which imposes the tax on each deed or writing by which realty that was sold is conveyed to the purchaser, or to another person at the purchaser's direction. How both deed taxes read at the recording desk in Carroll County's seat is set out on the Hillsville town page. In order, the grantor tax works like this.
The consideration goes on page one
The deed states the amount of the consideration on its first page. Without it, the deed is not admitted to record.
The tax is figured
The tax runs at 50 cents for each $500 or fraction of the greater of the consideration or the value, with liens that stay on the land left out of the base.
The clerk certifies payment
The clerk of the court where the deed is first recorded affixes a certification that the tax has been paid.
The money is divided
The clerk returns the grantor tax one-half into the state treasury and one-half into the treasury of the locality.
The grantor tax is not the only charge on that deed: Va. Code 58.1-801 separately levies a state recordation tax. How the two differ, and which deeds the Code excludes, is covered in what the grantor tax in Virginia is.
A seller's charge on the settlement statement, unless the contract moves it
Va. Code 58.1-802 does not leave the payer to custom; it names one, and then lets the parties change it.
The tax "shall be paid by the grantor, or any person who signs on behalf of the grantor", and in a sale the grantor is the seller. The same sentence lets the grantor and grantee arrange for the grantee to pay all or a portion of it. A settlement statement drawn on that default carries the grantor tax on the seller's side, and it moves to the buyer's side only as far as the parties have agreed.
The section carves out one case itself: no grantor tax is imposed when the grantor is a locality at a judicial sale of tax-delinquent property. Who pays the other charges at a Virginia closing is a separate question, taken up in who pays closing costs in Virginia.
A seller of land held for investment or for use in a business who plans to acquire replacement real property may be looking at a like-kind exchange, a federal income tax arrangement with its own deadlines and rules, covered in what a 1031 exchange is. That is a separate question from the deed tax, and how a given deed in an exchange is taxed at recording is for the closing attorney to confirm.
Checking the grantor tax line on a deed for land you are selling?
Send the county and the contract terms you have so far, and Lowell will show you where the grantor tax sits on your side of the closing and who confirms the figure. No cost, no obligation.
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Questions about this term
Is the grantor tax figured on the sale price or on the assessed value?
On whichever is greater. The rate of 50 cents for each $500 or fraction applies to the consideration or the value of the interest, whichever is larger, once that exceeds $100 and without counting any lien or encumbrance that remains on the property. For this chapter of the Code, value means the most recent property tax assessment when the property is conveyed.
Where this page's facts come from
Every rule, office and figure above traces to one of these. Rules change; check the office before you act on one.
- Va. Code 58.1-802: grantor's tax on deeds Code of Virginia
- Va. Code 58.1-801: state recordation tax on deeds, and the meaning of value Code of Virginia