Office of the Attorney General
Commonwealth of Virginia
September 6, 1984
TAXATION. RECORDATION. DEED OF GIFT WHICH DOES NOT CONTAIN STATEMENT TO THAT EFFECT SUBJECT TO TAX UNDER § 58-54.
The Honorable D. Bruce Patterson Clerk
Circuit Court of Rockbridge County
You have asked whether a certain deed, a copy of which you enclosed with your letter, is subject to the recordation tax imposed under § 58-54 of the Code of Virginia. You state that while no consideration was involved in the current transaction, you believe the deed is subject to the recordation tax imposed by § 58-54 and should be calculated upon the current fair market value of the property conveyed.
You note further that the conveyance is made in compliance with an earlier recorded agreement. An examination of the deed shows that: (a) the agreement was between the grantor of the deed, Washington and Lee University, and another party, now deceased, who gave the property to the University; (b) the agreement required the University, if and when it no longer desired to retain the property for the purposes set forth therein, to convey such property to the then living next of kin of the donor; and (c) the deed conveys the property to such person as determined by the United States Court of Appeals for the Fourth Circuit in Fletcher v. Washington and Lee University, 706 F.2d 475 (4th Cir. 1983).
Your inquiry is whether the deed is exempt from the recordation tax imposed by § 58-54 because (a) the property is conveyed pursuant to the provisions of an earlier recorded agreement, and (b) the transaction is a conveyance without consideration, i.e., a deed of gift.
Section 58-54 imposes a tax on every deed which is admitted to record except those exempt by law from such tax. The tax imposed under this section is based on the greater of the consideration of the deed or the actual value of the property conveyed. Sections 58-60 through 58-64.1 provide circumstances in which a deed will be exempt from recordation taxes.
I have examined the exemption provisions and find none that would apply to the recordation of a deed where the conveyance was made pursuant to the type of recorded agreement presented. 1 Although an exemption exists for deeds of gift, for the reasons set forth below, I also conclude that this exemption is not applicable.
Section 58-61(B) provides an exemption for deeds of gift. This section reads:
- "No recordation tax shall be required for admitting to record any deed of gift between an individual grantor or grantors and an individual grantee or grantees when no consideration has passed between the parties; however, any such deed shall state therein that it is a deed of gift." (Emphasis added.)
2 Furthermore, this exemption provision is limited to deeds between an individual grantor or grantors and an individual grantee or grantees. 3 The grantor in the deed is Washington and Lee University, a Virginia nonstock corporation and not an "individual grantor" as required by § 58-61(B).4 Thus, for this additional reason the exemption of § 58-61(B) is not applicable to the instrument under consideration.
Based on the foregoing, I am in agreement with your conclusion that the deed in question is subject to the recordation tax imposed by § 58-54. Because no consideration was involved, the amount of the tax should be calculated on the fair market value of the property at the time of conveyance. 5
Gerald L. Baliles
Attorney General
1 Section 58-64(A)(12) does not apply because, inter alia, the transfer is not pursuant to a will or trust instrument. Rather, the underlying agreement appears to have created a fee simple subject to a future interest in the then living next of kin of the University's grantor upon the occurrence of the conditions set forth in the agreement. Nor is the deed the type of supplemental writing exempted by § 58-60.
2. See 1982-1983 Report of the Attorney General at 593. Only in transactions solely between husband and wife is jig statement required in the deed that the conveyance is a deed of gift. See § 58-61(A)(3).
3 The term "individual" is defined as "[o]f or relating to a single human being." The American Heritage Dictionary 670 (1981).
4 See 1975-1976 Report of the Attorney General at 385 which implies that individual grantors or grantees are required in order for the exemption now set forth in § 58-61(B) to apply. See also 1982 Legislative Impact Statement of the Department of Taxation on House Bill 82 noting that the original version of this bill deleting the word "individual" would have broadened this exemption provision to include entities other than individuals.
5 The time of conveyance is the date the deed was delivered to the grantee, which may or may not correspond to the date of recordation or the date of the deed. See 1973-1974 Report of the Attorney General at 408.
1984-85 Va. Op. Atty. Gen. 383, 1984-85 Va. Rep. Atty. Gen. 383, 1984 WL 184296 (Va.A.G.)