Monday, December 3, 2007

Closing Costs Leap 500%

Starting January 1, 2008 seller closing costs are set to rise five fold. The policy affects the county transfer tax and the state tax on the recordation of the Deed to the buyer and the grantor's tax to the seller. That's right folks - a 500% increase!

For example, on a $500,000 property the grantor's tax is $500. After Jan. 1st - it will be $2,500.

At least one county (Loudoun) has challenged the increase and the Virginia Supreme Court is scheduled to hear the case in January '08. Until they hash it all out - the new higher tax will be collected. To make matters worse - the percentage collected will be based on the higher amount of either the sales price or the current tax assessors appraised value - which in the current market can be quite a bit higher.



Posted by Northern Virginia Association of REALTORS® (NVAR)
Sunday, November 18, 2007

Grantor’s Tax to Increase January 1, 2008
NVAR has just received notice that the Grantor’s Tax increase approved as part of the 2007 transportation funding package will take effect Jan. 1, 2008. The Virginia General Assembly and the Northern Virginia Transportation Authority (NVTA) voted earlier this year to increase the rate to a total of $5.00 per $1,000. This increase, along with revenues from six additional taxes and fees, will be dedicated to transportation projects in the region.

The localities affected by the increase are:
the City of Alexandria, Arlington County, City of Falls Church, City of Fairfax, Fairfax County (including the Towns of Clifton, Herndon and Vienna), Loudoun County, City of Manassas, City of Manassas Park, and Prince William County.

The Northern Virginia Transportation Authority will release official guidelines on fee collection in early December.

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