Tax Type
Recordation Tax
Description
Church bishop's residence
Topic
Exemptions
Date Issued
06-29-1988
June 29, 1988
Re: Request for Ruling; Recordation Tax
§58.1-811 Conveyance to Trustees of Church
Dear*************
This is in response to your letter of February 19, 1988, in which you requested a ruling relating to a deed of trust for the construction of a residence for the bishop of a church organization. I apologize for the delay in responding.
Facts
A church is having a residence constructed for its bishop and seeks to record a construction loan deed of trust to secure its funds advanced to the builder. A question has arisen as to whether the deed of trust qualifies for the exemption in Va. Code §58.-1-811(A)(2) because the property is not currently owned by the church.
Discussion
Section 58.1-811 begins with "The taxes imposed by §§58.1-801 and 58.1-803 shall not apply to any deed conveying real estate:" The emphasized section, §58.1-803, is the section imposing a tax on deeds of trust. Thus, the exemption is clearly intended to apply to conveyances where a church advances its funds to purchase or build a residence for its minister. The fact that a church does not own the land is not relevant to the exemption for a deed of trust because one who owns land cannot also have a security interest in the land.
You also state that you believe that the transaction qualifies for the exemption because the trustee under the deed of trust is an officer of the church. Under §58.1-811(G) a "trustee" is defined as an ecclesiastical officer within the meaning of §57-16. The department has no information as to the person's actual status in the church and expresses no opinion as to whether or not he qualifies as a trustee of the church for purposes of §58.1-811.
Determination
Accordingly, the deed of trust described would qualify for the exemption in §58.1-811 and may be recorded free of recordation tax provided that the conveyance is to a "trustee" within the meaning of §58.1-811(G).
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner