Elena is purchasing a home in Virginia using a VA loan. The seller's agent claims that because Elena is using a VA-guaranteed loan, she is completely exempt from all Virginia state and local recordation taxes on her deed of trust. Elena's agent is skeptical. Which of the following best describes the correct legal position regarding recordation tax exemptions for VA loans in Virginia?
Correct Answer
C) The seller's agent is incorrect; while certain specific exemptions exist under Virginia law, a blanket exemption for all VA loan transactions from all recordation taxes is not established by Virginia Code
There is no blanket exemption in Virginia Code that exempts all VA-guaranteed loan transactions from all state and local recordation taxes on the deed of trust. While Virginia Code § 58.1-811 does enumerate specific categories of exemptions from recordation taxes (such as certain government transfers, refinances in specific circumstances, and others), a general exemption for all VA loan transactions is not established in Virginia law. Elena's agent is correct to be skeptical of the sweeping claim. Candidates must be careful not to confuse the VA loan program's federal benefits (such as no down payment, no PMI) with a nonexistent state tax exemption.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
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