Susan is purchasing a condominium in Arlington, Virginia and financing the purchase with a new deed of trust loan. At closing, she learns that Virginia imposes both a recordation tax on the deed of conveyance and a separate recordation tax on the deed of trust. Which of the following correctly describes how these two recordation taxes are typically allocated between buyer and seller in Virginia?
Correct Answer
C) The seller pays recordation tax on the deed of conveyance; the buyer pays recordation tax on the deed of trust
In Virginia, there are two separate recordation taxes at closing. The recordation tax on the deed of conveyance (transferring title from seller to buyer) is typically paid by the seller under Virginia Code § 58.1-801 and § 58.1-802. The recordation tax on the deed of trust (the buyer's loan security instrument) is paid by the buyer/borrower under Virginia Code § 58.1-803, because the buyer is the trustor executing that instrument. This allocation reflects each party's role in creating the respective instrument.
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