On every real estate transaction in Virginia both the home buyer and home seller are required to pay taxes - the home seller pays a grantors tax and the home buyer pays recordation taxes (stamps) on both the deed and the mortgage.  The Commonwealth of Virginia requires Grantors' taxes and Recordation tax for the deed to be paid on the GREATER of the sales price or the assessed value.  This has not been meaningful for the last few years as sales prices have easily outstripped assessments in all local jurisdictions.  With the decline of property values this year, there are more cases where the contract sales price is below the assessed value.

 

This means that homebuyers and sellers are paying higher taxes and often will not realize this until settlement.  On a property that sells for $400,000 but has an assessed value of $448,000 the home seller will pay $48 more (based on current rate of .1%) and the home buyer will pay $158.40 more (based on the current rate of .25% to the state and .083% to the county) using the assessed value as opposed to the sale price.  When the grantors tax goes up to 0.5% on January 1, 2008, the impact to the seller will be a $240 difference by using the assessed value as opposed to the sales price.

 

 
Posted by Jeff Divack on 11/29/2007 09:52 AM   Comments (0)  
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Fairfax County Offers Low Priced Mortgages to Residents
11/16/2007
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The county of Fairfax in conjunction with the Virginia Housing Development Authority (VHDA) offers several programs aimed at reducing mortgage costs and enabling more County residents to purchase homes in Fairfax County. These programs consist of… more
 

Jeff Divack

Burke, VA

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Intercoastal Mortgage Company

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