A Virginia real estate closing involves a sale price of $500,000. The deed of conveyance is recorded to transfer title from seller to buyer, and a deed of trust is recorded to secure the buyer's new loan. Which of the following correctly identifies the instruments subject to Virginia recordation tax and the party responsible for each?
Correct Answer
C) Both instruments are subject to recordation tax; the seller pays tax on the deed of conveyance and the buyer pays tax on the deed of trust
In Virginia, both the deed of conveyance and the deed of trust are subject to recordation taxes when recorded in the land records. Under Virginia Code § 58.1-801 and § 58.1-802, the seller pays the recordation/transfer tax on the deed of conveyance (as the grantor conveying title). Under Virginia Code § 58.1-803, the buyer pays the recordation tax on the deed of trust (as the trustor executing the security instrument). Each party pays the tax associated with the instrument they execute.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
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