Virginia's Regional Congestion Relief Fee, raises the recordation tax another $2,000 on a $500,000 house (it was $500, soon it will be $2,500).
I got an email from my non-ABA preferred closing company.
Erin Taylor Rauner, Counsel to Monarch Title wrote:
"... pending implementation of the "Regional Congestion Relief Fee"... this fee essentially raises the total recordation tax (currently charged to the sellers) from $.10 per $100 to $.50 per $100.... While the legislation is being challenged, it is currently believed that it will be imposed on recordings beginning January 1, 2008."
I never really understand that "50 cents per $100" stuff, so I like to give examples. On a $500,000 house, the tax goes from $500 to $2,500, an increase of $2,000.
Also don't wait until the final days of the year. The settlement companies will be packed, and you have to watch out and make sure you don't miss the deadline due to holidays and recordation of the sale. Monarch recommends closing before December 21st 2007.
So sellers, I wouldn't slash your price in order to save the $2,000, but if you have the opportunity to counter an offer, you might consider that $2,000 variable.And for buyers, make sure the seller you are negotiating with knows about this tax, and what they are "saving" by taking your offer that closes in December.
And if you are already under contract with a January closing, you might consider a trade, to drop the price $2,000 (on a $500k house) and close a couple weeks earlier. The benefit to the seller is getting their money faster, and having to pay less of their mortgage (assuming a vacant property).
Written by Frank Borges LL0SA- Broker FranklyRealty.com
(please report typos)
Other keywords: Virginia Grantor's tax
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