Marcus is purchasing a home in Fairfax County, Virginia, for $450,000. The transaction involves both a deed of conveyance and a deed of trust securing a $360,000 loan. Which statement best describes how Virginia's recordation tax applies to this transaction?
Correct Answer
A) Both the deed of conveyance and the deed of trust are subject to separate recordation taxes under Virginia law
Virginia imposes recordation taxes on both instruments separately. Under Va. Code § 58.1-801, the deed of conveyance is taxed based on the purchase price. Under Va. Code § 58.1-803, the deed of trust (or mortgage) is taxed based on the amount of the obligation secured. Both taxes are collected at recordation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Many states have laws to limit how much property taxes can increase each year, regardless of market value fluctuations.
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
A transfer tax is a tax imposed on the transfer of ownership of real estate.
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