Virginia Grantor Tax and Recordation Tax: Who Pays on a Commercial Sale, and How Much

On the Virginia grantor’s tax, who pays on a commercial sale is set by statute: the seller (grantor) pays the grantor’s tax of 50 cents per $500 of value, though the parties may agree otherwise. The buyer customarily pays the recordation tax on the deed – 25 cents per $100 to the state plus a local tax equal to one-third of that – and the recordation tax on any new deed of trust. In Richmond, Henrico and Chesterfield, a buyer pays about 0.33% of the price on the deed, and the seller about 0.10%.

Those percentages add up on a commercial deal, and the purchase and sale agreement (PSA) decides who actually pays. This post goes through the statutes, confirms what the three core Richmond-area localities charge, works through an example, and covers how the split is negotiated. For the broader investment picture, see our guide to Richmond net lease investment properties.

Who pays the Virginia grantor tax on a commercial sale?

Code of Virginia § 58.1-802 imposes the grantor’s tax on deeds conveying realty that is sold and says it “shall be paid by the grantor … however, the grantor and grantee may arrange for the grantee to pay all or a portion of the tax.” The Virginia Tax regulation (23VAC10-320-30) adds that the legal incidence is on the grantor, but who bears the cost is a matter between the parties, and the clerk simply will not record the deed until the tax is paid.

The rules are the same for commercial and residential property. The buyer’s side is the recordation tax: § 58.1-801 does not name a payer, but by custom the purchaser pays it – the City of Alexandria’s recordation tax page, for example, says the tax “is paid by the purchaser or his/her designee.” The clerk splits the grantor’s tax half to the state and half to the locality. The deed must state the consideration on its first page.

What are the grantor’s tax and recordation tax rates?

Note two points about the base. First, both taxes use the greater of price or assessed value, so a buyer who negotiates a price below the assessment still pays tax on the assessment. Second, the grantor’s tax excludes only liens that remain on the property – an assumed loan, for example. A mortgage paid off at closing does not reduce it, per the regulation.

Do Richmond, Henrico and Chesterfield charge the local recordation tax?

Yes, all three do. Henrico’s ordinance is explicit: County Code § 20-148 imposes “a county recordation tax in an amount equal to one-third of the amount of the state recordation tax.” For the City of Richmond and Chesterfield County, we confirmed the local tax using the Supreme Court of Virginia’s official circuit court deed fee calculator, which clerks point to on their own recording pages. As of September 24, 2026, it charged a local tax of exactly one-third of the state tax on both deeds and deeds of trust in Richmond City, Henrico and Chesterfield circuit courts. We could not open the text of the Richmond and Chesterfield ordinances themselves, so check with the clerk’s land records office before closing.

What does it cost on a real deal? A worked example

Assume a $3,500,000 sale of a retail building in the City of Richmond, assessed below the price, with the buyer financing $2,450,000 (70%) through a new deed of trust. These figures match what the state deed fee calculator returned for Richmond City Circuit Court.

If the same building were assessed at $4,000,000, the calculator taxed the deed on $4,000,000: the deed recordation taxes rise to $13,333.33 and the grantor’s tax to $4,000. The calculator also added roughly $50 of fixed clerk and processing fees per five-page instrument. On very large loans, the deed of trust tax drops above $10 million – for a $15 million loan, the state tax is $36,000, not $37,500. A refinance of debt that was already taxed uses a lower schedule under § 58.1-803(E), starting at 18 cents per $100.

How do buyers and sellers negotiate these taxes in a PSA?

Virginia custom is that the seller pays the grantor’s tax and the buyer pays recordation taxes and its own loan costs, but everything is negotiable. Common approaches:

• Custom, stated explicitly: write “Seller shall pay the grantor’s tax; Purchaser shall pay all state and local recordation taxes on the deed and any deed of trust.” Silence invites a closing-table argument.
• Split or shift: in a competitive bid, a buyer may offer to pay the grantor’s tax; in a soft market, a seller may agree to split the deed recordation tax. Either way, it is really a price adjustment.
• Assessment above price: if the assessment exceeds the price, both taxes rise. Decide in advance who bears the difference.
• Assumed debt: an assumed loan cuts the grantor’s tax base, but a new or modified deed of trust may carry its own tax. Have the settlement agent run both.
• Exemptions: § 58.1-811 lists exemptions – for example, certain transfers to a corporation controlled by the transferors under IRC § 351. Whether one applies is a question for your attorney, not your broker.

Get help pricing a Richmond-area acquisition

This post is general information, not legal or tax advice; the circuit court clerk, your settlement attorney and your CPA have the final word on what you owe. If you are weighing a purchase and want help building total acquisition cost into your offer, reach out or look at my services. For more on lease types, cap rates and diligence, see our Richmond net lease investment guide.