Before you file your quitclaim deed in Virginia, consider the filing fees and the potential tax implications, whether you’re the grantee or grantor. Understanding the expenses can help you transfer property without warranties more easily and confidently.
Filing Fees
The filing fee payment structure is as follows (Va. Code § 17.1-275):
- $18 for documents that are ten pages or less.
- $32 for documents that are 11 to 30 pages.
- $52 for documents that are 31 pages or more.
Please ensure each document page is no larger than 8.5 by 14 inches. If you have a plat or map sheet larger than 8.5 by 14 inches, you must pay a $17 additional fee for each oversized page.
Taxes
1. Recordation Tax
Per Va. Code § 58.1-801, the recordation tax rate is 25 cents for every $100 (or fraction thereof) of the deed’s consideration or the actual value of the property, whichever is greater.
Some Virginia cities and counties impose an additional recordation tax. These additional taxes can vary but are usually about one-third of the state recordation tax.
Who Pays the Transfer Tax?
Differing from the majority of states, the buyer or grantee usually pays the recordation tax to the state of Virginia.
Exemptions to Transfer Tax
Several exemptions exist to the recordation tax per Va. Code § 58.1-811. A transfer is exempt from the recordation tax if:
- The property is a gift and no payment is exchanged for it.
- The grantee is a college or educational institution that is not a source of revenue.
- The grantee is a church or religious place of worship.
- The grantee is a government entity.
- The grantee is a 501(c)(3) nonprofit organization.
2. Grantor’s Tax
Unlike many states, Virginia has a special grantor’s tax distinct from the real estate transfer tax. This tax is imposed on all deeds involving property valued at over $100 (Va. Admin. Code § 23VAC10-320-30).
The tax amount isn’t at a pre-established rate. Instead, it’s calculated by taking the transferred property’s value or consideration and subtracting any existing encumbrances or liens. The tax calculation can vary depending on local ordinances and regulations, so it’s good practice to consult a qualified tax professional or attorney for guidance unique to your situation.
3. US Gift Tax
If the grantor transfers property as a gift without consideration or payment, a federal gift tax will likely apply to the property transfer. You can use IRS Form 709 to discover the amount you owe and how to pay it properly.
The IRS establishes annual exclusions yearly, allowing grantors to give up to a certain amount per recipient without having to pay any tax. For 2024, the yearly exclusion is $18,000, meaning the grantor can give $18,000 to as many recipients as they want (as long as they don’t exceed their lifetime limits) without paying tax.
4. Capital Gains Tax
Both Virginia and federal capital gains taxes may apply to the property transfer. Virginia taxes capital gains as income at a rate between 2% and 5.75%, depending on your tax bracket. IRS Topic No. 409 and IRS Publication 551 explain the federal versions of capital gains taxes.
Depending on how long the grantor holds the property before conveying it, they may have to pay short-term or long-term capital gains tax when they sell it for consideration with a quitclaim deed. Short-term capital gains are subject to the federal ordinary income tax rates, while long-term capital gains are taxed at more advantageous rates (0%, 15%, or 20%, depending on your situation).
