Big changes are on the forefront for Virginia real estate if you are selling or buying a house. The state Grantor’s Tax is going from $1.00 per thousand to $2.50 per thousand of the sales price or tax assessed value, whichever is higher on July 1, 2013. Here is the impact – on a sales price of $500,000 the fee is going to go from $500 to $1,250
The tax is typically paid by the seller in a resale scenario and the builder usually passes this fee on to the buyer. As a result, it has become a nominal cost associated with selling to one of a greater impact and one that will potentially bring attention to people on both sides of the table. In other states, including Maryland, this tax is absorbed by the seller with first time buyers, is split in most cases but in the end, is a negotiable item between the seller and buyer. It will be interesting to see if this becomes the case in Virginia. Our fee is less than Maryland’s but is still is significant enough to take notice and pay attention to what will be the impact as it becomes implemented and the prices increase.
The change goes into effect on July 1st so you will want to plan accordingly. This year July 1st falls on a Monday so in order to avoid paying the tax, we are encouraging our clients to close by the 26th of June. This will ensure the property gets recorded at the courthouse prior to the Friday rush that many title companies are expecting and save your money.
Many of you may recall that back in January of 2008, this tax went up 5 times so the same scenario listed above would have resulted in a $2,500 tax on the sale of properties in Virginia. Therefore, this increase is not as significant. In March of that year the Supreme Court of Virginia repealed the tax stating a transportation authority NVTA did not have the right to levy taxes.
The additional fees today are also put in place to cover costs associated with transportation initiatives and road improvements in Northern Virginia and Hampton Roads in an effort to ease the congestion in these regions. As such, this tax is only applicable to these regions. Let’s see some results, please.