Selling Your Home In Virginia Is Going To Get More Expensive

Last week the Northern Virginia Transportation Authority (NVTA) voted to increase seven taxes in Northern Virginia to raise $300 million in tax revenues for local transportation projects.

The most important tax for residents selling their home is an increase in the Grantor’s Tax from $1 per $1,000 of your sales price to $5 per $1,000 of your sales price. The other taxes relate to vehicle registration, new car tax and various taxes on cars. Here are the all tax increases:

• 40 cents per $100 increase in the real estate Grantor's tax
• 2 percent increase in the rental car tax
• 2 percent increase in the hotel/motel occupancy tax
• $10 increase in the vehicle safety inspection fee
• 1 percent initial vehicle registration fee (for new car purchases or those moving into the region)
• 5 percent sales tax on auto repairs
• $10 regional auto registration fee

This new tax is slated to take effect January 1, 2008. It will be challenged in court– so stay tuned!

What is the Grantor’s Tax?

The Grantor's Tax or Transfer Tax is the tax a seller pays to the county at closing. It currently is $1/$1,000 of the sales price of your home. For the average Arlington home– $739,000 the tax will increase from $739 to $3,695. It is a one time tax and only paid when you sell your home.

Why Did NVTA Raise the Tax?

Governor Kaine, as part of his legislative agenda, promoted a new transportation bill – the first in 21 years. The 21 year debate continued in the Virginia General Assembly on whether to increase taxes to raise funding for transportation projects. With most of the debate coming from the delegates outside the areas where transportation are critical (i.e, Northern Virginia and the Hampton Roads area) the bill was once again doomed. As a compromise, the General Assembly passed authority to the NVTA to raise local taxes for their own road projects. Board members from Loudon County and Manassas are questioning the General Assembly's authority to pass its ability to raise taxes to the NVTA and may be taking it to court.

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What Is the NVTA?