Virginia Mortgage Tax - Mortgage Tax In Virginia

Are you confused about the Virginia mortgage tax jargon? Although mortgage tax regulations look relatively straightforward it could become quite complicated if you are not properly informed. Let us help you simplify your state mortgage tax calculations. Fill out our simple mortgage quote with your requirements. We will study your needs and your situation and will offer information, advice and assistance that you need for purchasing mortgage in Virginia.

Virginia Mortgage Tax
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Virginia Mortgage Tax

Mortgage tax calculations in Virginia are based on which tax class your property falls under. For tax calculation purpose Virginia properties are grouped as follows:

Class 1 - One, Two, Three family homes
Class 2 - Comprises of three or more units including Cooperatives and Condominiums
Class 3 - Utility Company properties
Class 4 - Any other Commercial and Industry Property

Mortgage tax in Virginia becomes due at the time of recording a mortgage transaction. Both the lender and the borrower are required to pay a percentage of the taxes. A portion of your mortgage tax amount belongs to the town or city where your property is located and a predetermined portion is paid to the State of Virginia.

Mortgage Tax Payment in Virginia

In Virginia there is no state property tax. The tax amounts are set and collected at the local government level as a percentage of the original cost. Mortgage tax payments are calculated based on following information:

  • Mortgage loan amounts on which tax amounts are to be calculated
  • Property value for which you have already paid tax (tax-paid loan value of the mortgaged property) and the property appreciation value that is yet to be taxed (i.e., taxable value of your property)
  • Type of property to be mortgaged
  • Information about existing mortgage if any
  • In case you are refinancing then extent of increase in mortgage debt that needs to be taxed

Virginia Mortgage Interest Tax Deduction

Mortgage holders in Virginia are permitted to deduct all amounts paid towards mortgage interest each year, up to a particular predetermined maximum loan limit (currently up to $1 million). Mortgage points paid at the time of purchasing home loan is also deductible either in the year of purchase or through the mortgage term (depending on your specific situation). In order to claim mortgage tax deductions in Virginia you need to submit two signed and notarized affidavits copies mentioning the type of deduction you require along with other mortgage documents.

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