23 Va. Admin. Code § 10-320-30

Current through Register Vol. 41, No. 9, December 16, 2024

Section 23VAC10-320-30 - Additional tax paid by grantor

A. A tax is imposed, in addition to any other recordation tax, upon deeds, instruments, or other writings whereby realty sold is granted, assigned, transferred, or otherwise conveyed to or vested in the purchaser or, at his direction any other person, when the consideration for, or value of, the interest or property conveyed, exclusive of the value of any lien or encumbrance remaining thereon at the time of sale, exceeds $100.

The term "sold" imports a transfer of an interest for a valuable consideration, which may be money or anything of value.

B. The tax is based upon the net consideration. In determining the amount of the net consideration, only the amount of the liens and encumbrances on the property existing before the sale and not removed thereby may be deducted. The value of the lien or encumbrance remaining on the property sold, regardless of whether such lien is assumed or sold subject to such lien or encumbrance, is deductible.

C. The legal incidence of the tax imposed by § 58.1-802 of the Code of Virginia is on the grantor and not the grantee. This is a matter between the grantor and the grantee, and the clerk cannot be expected to ascertain who is bearing the economic burden of the tax. The clerk should not admit the deed to record until the tax is paid, whether it is paid by the grantor, the grantee, or some other person.

D. Examples of deeds taxable under § 58.1-802 of the Code of Virginia:

1. A conveyance of realty in exchange for other property.

2. A conveyance of realty in consideration of life maintenance. The consideration or value of the interest is the net value of the realty conveyed.

3. A conveyance by a defaulting mortgagor to the mortgagee in consideration of the cancellation of the mortgage debt. The consideration or value of the interest is the amount of the unpaid mortgage plus unpaid accrued interest.

4. A deed given by a trustee in a deed of trust for realty sold under foreclosure. The tax is computed on the accepted bid for the property plus costs if paid by the purchaser.

5. A conveyance of realty by or pursuant to a judgment or decree in a condemnation proceeding or a conveyance of such property under threat or imminence of such proceeding.

6. If a deed is given by an executor in accordance with the terms of a will and, by reason of a consideration passing between devisees, one of them takes a greater share in the realty than that to which he is entitled under the will, the deed given by the executor to convey such greater share is taxable on the consideration.

7. If in a partition deed some of the parties take shares greater in value than their undivided interest, a tax attaches to each deed conveying such greater share computed upon the consideration.

E. Examples of deeds not taxable under § 58.1-802 of the Code of Virginia:

1. The reconveyance of realty, conveyed to secure a debt, upon payment of such debt.

2. A deed to confirm title already vested in the grantee, such as a deed to correct a flaw in title.

3. A deed from an agent to his principal conveying real estate purchased for and with funds of the principal.

4. A deed executed by a debtor conveying property to a trustee for the benefit of his creditors; however, when the trustee conveys such property to a creditor or sells it to any other person, the deed executed by him is taxable.

5. A conveyance to a receiver of realty included in the receivership assets, and reconveyance of such realty upon termination of the receivership.

6. The conveyance of real estate by a corporation as a dividend.

7. Any deed conveying real estate from the United States, in the absence of Congressional consent, is exempt from the tax imposed by § 58.1-802 of the Code of Virginia on Constitutional grounds. Also, § 7.1-22C of the Code of Virginia provides that a conveyance to the United States or its agencies is exempt from the tax imposed by § 58.1-802 of the Code of Virginia if the lands acquired are to be used for "public purposes."

23 Va. Admin. Code § 10-320-30

Derived from VR630-14-802, eff. January 1, 1985.

Statutory Authority

§§ 58.1-203 and 58.1-802 of the Code of Virginia.