Tax year: The Virginia tax year runs January – December of the current year. Taxes are generally paid semi-annually or annually, in December and July. Taxes are calculated using the assessed value of the property.
Virginia Tax Collectors by County:
Click here for our comprehensive list of Virginia Tax Collectors, by county, with contact information for each.
County Online Property Tax Information:
Some Virginia Counties provide helpful websites that allow home owners to view their current tax information, bill and payments online. Go to Google, and type “Property taxes for Berkeley County”, or the county you are inquiring about. Click here to see our list of Virginia online property tax websites.
Payment of Property Taxes at Closing:
In refinances, most lenders require that taxes are current and up to date and all taxes due within 30-90 days of closing are collected and paid at closing.
The same is true for sales. Additionally, taxes for sales are prorated in such a manner that the seller will pay taxes through settlement, or credit the buyer with the same. From the date of settlement forward, the buyer shall pay taxes.
Be aware, that it can take up to two years for the new owners name to appear on tax bills. However, the purchaser is responsible for all taxes, and other county and state fees, such as water or sewer, from the date of closing. Likewise, all bills prior to closing remain the sellers responsibility.
All closings involving properties with public bills being assessed to it, will be required to pay all such bills current through closing, by the seller, after which said bills will be the responsibility of the buyer. Were possible, these items are prorated on the HUD; in some situations, the seller must contact the county to advice of the pending transaction, and arrange for the change over and payment of final bills.
Failure to pay the above mentioned items in a timely manner can affect the final recording of the deed on the property.
Virginia charges a clerk’s fee for every instrument presented to be recorded in the land records. As most deeds include an additional $10.00 surcharge on any deed in which recordation taxes are levied, it is safe to add an additional $10.00 to the following fee schedule: Currently fees generally are: deeds up to 10 pages=$20.00; 11-30 pages=$35.00; 31 or more= $55.00.
Deeds of Trust- up to 10 pages= $19.00, 11-30= $34.00; 31 pages or more= $54.00
Releases and Satisfactions= $20.00.
Virginia Recording Taxes:
In sales, the seller pays the state transfer tax, which is one percent, or $1.00/$1,000 of the transaction.
The buyer or borrower is responsible for county and state recordation taxes at a rate of one half percent to the County or $.50 cents per $1,000 of the transaction, and to the state, one and a half percent, or $1.50/$1,000 of the transaction. This is imposed on the deed AND the deed of trust in sales. In a refinance on a deed of trust, Virginia does allow a discount on the state recordation taxes only when the refinance includes a payoff of a mortgage with the refinance. In this case, the buyer or borrower is responsible for state recordation taxes at a rate of $.36 per $1000 of the transaction.
Determining Property Ownership:
Property ownership is determined by title examination. In Virginia, a title exam used for a real estate transaction must be conducted by a company whom is registered with CRESPA as well as the Virginia State Bar.
Virginia Title Insurance rates:
Click here to see a table of Virginia title insurance rates.
1099 Reporting to the IRS:
At closing, the seller will review a Certification of No Information Reporting if the sale of their property results in proceeds of less than $250,000 as an individual or $500,000 if a married couple.
If the proceeds are higher than this, the seller may chose to have the title company report the 1099 filing to the IRS, or may elect, in writing, to have the tax accountant or attorney do their 1099 filing.
Investment Properties and Commercial Transactions:
If you are buying an investment or commercial property, please notify the title company prior to closing so we can help you meet all counties requirements regarding the same.
If your property is going to be a part of a 1031 exchange, you must also notify the title company prior to closing. Failure to do so could result in transaction not going through an intermediary. Even the failure to correctly follow any of the required steps under the Federal Tax Law regarding 1031 Exchanges, will negate the transaction, and the tax benefits will no longer be available.
Further, a Qualified Intermediary will be provided. At The South Mountain Group, Inc. our intermediary?s are all Certified Public Accountants, and will guide you step by step through the process.
Click here for more information about 1031 Exchanges.
Payoffs of Liens and Judgments:
All current liens against the property must be paid at closing to ensure the first position of your new lenders deed of trust. A title examination ensures that all recorded liens will be found, allowing us to collect for them, as well as to pay them off.
In some instances, the current liens are the expected deed of trusts, such as a first or second mortgage against the property.
Your current lender must provide a payoff. Some lenders will require a signed Release of Information from the borrower in order to provide the title company with this payoff.
You may be contacted to assist in obtaining a final payoff. Although rare, some lenders, contrary to the excepted practice and customary courtesies of most lenders today, will not cooperate in providing a third party with a payoff.
In those situations, you will be asked to contact the lender yourself, to ask for a payoff.
Payoffs are different from the principal balance of a loan in that a payoff includes any prepayment penalties, interest, and fees. A final payoff is a requirement of closing. Payoffs are requested to be good for a minimum of 10 days past your closing date.
Any additional liens found recorded against the property will also need to be collected and paid at closing. Again, you may be asked to provide specific information about any lien, in order for a proper and final payoff of the lien be obtained.
A judgment search is also run for borrowers and sellers and any judgments that affect or could affect the title to the property will be collected and paid at closing.
Virginia does vest title to married couples as tenants by the entirety. Any Federal tax lien will attach regardless. In Virginia, judgments from the Circuit Court attach for twenty years.
In all other situations, judgments must be paid, with certain exceptions, such as the age of the judgment, or the type of judgment.
Transfer Funds at Closing for Sales in Virginia:
Virginia is not considered a wet settlement state, and a loan is not disbursed until the new deed is recorded. Be aware this can take as little as a day, or as much as a week, depending on how busy the court is.