Increase In Virginia Grantor’s Tax And The Rest Of The Northern Virginia Transportation Plan

As some of you may or may not know, the Virginia General Assembly is increasing the Grantor’s Tax as part of the Northern Virginia Transportation Plan passed last March. Currently, the Grantor’s Tax is $1 per $1000 of the sales price or assessed value, whichever is greater. The Virginia General Assembly approved an increase from $1 to $5 per $1000 effective July 1, 2007. The latest news is that they are delaying the increase until September 1, 2007 and may only be raising it to $4 per $1000.

As a seller of a $400,000 property in Virginia, the new rate of $5 per $1000 means an increase from $400 to $2,000. Even if the lesser amount of $4 per $1000 goes into effect, the amount would be $1,600, an increase of $1,200.

But wait, there’s more…

According to NVAR, here are some other things included in the plan:

• 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

In addition, the authority may choose to implement the following optional revenues:

• Annual commercial real estate fee of up to 25 cents per $100
• $10 local car registration fee
• Commercial/residential impact fee (amount to be determined)

This seems to be quite a topic of discussion as seen in recent (and most likely future) media coverage in Loudoun County as well as the rest of Virginia. At this point, no one knows the exact date when the increase will go into effect nor the size of the increase.  But we will keep a close eye on this and will continue chatting with title companies, settlement attorneys and others to get the latest updates. As soon as we know more, we’ll let you know.

Further Reading:

Home Sellers To Pay Most For New Roads – by Jason Jacks of Loudoun Times Mirror

Virginia HB3202

Northern Virginia Transportation Alliance