Method for Calculating Grantor’s Tax

Changes to Virginia law effective July 1, 2007, provided that a grantor’s tax be imposed “when the consideration or value of the interest, whichever is greater, exceeds $100…” (emphasis added).

Title companies have taken the position that the added phrase can only refer to the tax assessment, and they have decided to collect the Grantor's tax based on the higher of the tax assessed value or the sales price. While that's not an unreasonable assumption, you should know that the assessed value is not necessarily synonymous with the "actual value" or the "value of the interest."

NVAR will seek legislation during the 2009 legislative session to revert to a determination of grantor’s tax based on the property’s actual value.

For more information, contact Mary Beth Coya at mbcoya@nvar.com or Lisa May at lmay@nvar.com.