Tax Type
Recordation Tax
Description
Grantor's Tax
Topic
Documents Subject to Tax
Date Issued
11-19-1986
November 19, 1986
Re: §58.1-802 Grantor's Tax; Consideration
Dear ********************
This is in response to your letter of April 15, 1986, requesting a ruling on the proper amount on which to impose the additional tax under §58.1-802, also known as the grantor's tax. Your question is whether the tax should be based on the actual consideration when it is less than the assessed value of the property sold.
The tax imposed by §58.1-802 (Grantor's tax) is measured by the "consideration or the value" of the interest." In an opinion of the Attorney General dated February 15, 1973, Report of the Attorney General 1972-1973 at page 434, (copy enclosed) this language was interpreted as follows:
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- The tax imposed by [§58.1-802] is computed upon the actual net consideration if it can be definitely determined, or the actual net value of the [property sold] if the consideration cannot be determined. The net consideration or the net value is the gross consideration or the gross value less the amount of any liens or encumbrances upon the [property sold] existing before the sale and not removed thereby.
- The tax imposed by [§58.1-802] is computed upon the actual net consideration if it can be definitely determined, or the actual net value of the [property sold] if the consideration cannot be determined. The net consideration or the net value is the gross consideration or the gross value less the amount of any liens or encumbrances upon the [property sold] existing before the sale and not removed thereby.
The tax imposed by §58.1-801 (Grantee's tax) is measured by the "consideration of the- deed or the actual value of the property conveyed, whichever is greater." Thus, when the actual value (as indicated by the assessed value) is greater than the consideration the tax is properly based on the actual value. However, the grantor's tax imposed by §58.1-802 should still be based on the consideration.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner