I gave the county an appraisal showing my property was worth less than its tax assessment, but the clerk only cut the recordation tax value partway — can I make them use the appraised value?

Plain-English summary

In January 2024, the taxpayer presented a deed to a Virginia county for recording and handed the county an appraisal showing the property was worth less than its assessed value for local real estate tax purposes. The county met the taxpayer halfway: it reduced the value used for recordation tax below the assessment — but not down to the appraised value. The taxpayer appealed to the Department under Va. Code § 58.1-1821, arguing the tax should have been based on the consideration paid, which equaled the appraisal.

How the recordation tax works (for this deed, recorded before the 2024 law change):

• The state recordation tax is 25¢ per $100 (or fraction) of the greater of the consideration or the actual value of the property conveyed (Va. Code § 58.1-801); a city or county may add one-third of the state tax as a local tax (§ 58.1-814).
• The grantor's tax adds 50¢ per $500, exclusive of liens remaining at sale, on the same greater-of base, split equally between state and locality (§ 58.1-802).
• The circuit court clerk where the deed is first offered determines and collects the tax and may ascertain consideration and actual value "by inquiry, affidavit, declaration or other extrinsic evidence acceptable to the clerk" (§ 58.1-812 B).

The assessment is a strong starting point — but not the only permissible evidence. Because local assessments must be made at 100% of fair market value (§ 58.1-3201), a recent assessment carries a strong presumption of accuracy (Shoosmith Bros., Inc. v. County of Chesterfield, 268 Va. 241 (2004); Tidewater Psychiatric Institute, Inc. v. City of Virginia Beach, 256 Va. 136 (1998); P.D. 88-317). But the clerk is not required to use the assessed value to the exclusion of other reliable information: if a clear preponderance of the evidence shows the assessment doesn't reflect fair market value as of the transaction date, the clerk may rely on that evidence instead (P.D. 00-97, 06-77, 11-191, 15-205, 21-109) — and where the assessment isn't recent, the clerk should seek other evidence.

Valuation is the clerk's call, reviewed only for reasonableness. Valuing real estate is a factual determination best made by someone thoroughly familiar with the property and local market conditions — for recordation tax, that's the clerk (P.D. 91-146). The Department defers unless the valuation appears unreasonable, and a taxpayer's disagreement alone doesn't make it so. So instead of substituting its own number, the Department sent the ruling to the County's clerk with a request to review the property's actual value in light of all relevant, reliable information — including the taxpayer's appraisal. If the County confirms a lower fair market value, the Department will refund the state portion and the County will refund the local portion.

The rule has since changed — the ruling itself says so. For deeds recorded on or after July 1, 2024, House Bill 574 (Chapter 140, 2024 Acts of Assembly) amended the Recordation Tax Act to define "value of the property conveyed" and "value of the interest" as the most recent property tax assessment at the time of conveyance (Va. Code § 58.1-801 A). This deed was recorded in January 2024, so the old greater-of-with-evidence rule still governed it.

What this means for you

Buyers who recorded before July 1, 2024 with a below-assessment price

This ruling (and a companion 2025 ruling in this corpus involving a foreclosure deed and broker's opinions of value) confirms the path: present the clerk — or the Department on appeal — with reliable valuation evidence such as an appraisal showing fair market value on the transaction date. The clerk can accept it over the assessment on a clear preponderance of the evidence, and the Department will prod a clerk to genuinely review that evidence.

A partial reduction isn't necessarily the end

Here the county had already come down from the assessed value but stopped short of the appraisal. The Department still remanded for a documented review considering the appraisal — the clerk's number must be an informed factual determination, not a split-the-difference compromise the evidence doesn't support. But remember the deference: if the clerk's reviewed value is reasonable, disagreement alone won't overturn it.

Anyone recording deeds today

For recordings on or after July 1, 2024, the statute now fixes "value" at the most recent property tax assessment — appraisals no longer move the recordation tax. The greater-of comparison runs between your consideration and that assessment. Factor that into closing costs, especially for distressed or below-assessment purchases.

Common questions

Q: The county already reduced the value below the assessment. Why did the Department still remand?
A: Because the taxpayer's appraisal evidence deserved a documented review. The clerk may rely on reliable evidence of actual value, and the Department asked the clerk to consider all relevant, reliable information — including the appraisal — and report the correct fair market value.

Q: Will the taxpayer automatically get a refund at the appraised value?
A: No. Valuation remains the clerk's factual determination, and the Department defers unless it appears unreasonable. The refund (state portion from the Department, local portion from the County) follows only if the County's review supports a lower value.

Q: Does the grantor's tax follow the same value?
A: The grantor's tax (50¢ per $500, exclusive of liens remaining at the sale) is imposed on the same greater-of base — the actual value or the consideration — and is split equally between the state and the locality.

Q: Would this case come out the same way today?
A: Not for a new deed. The ruling itself warns that for deeds recorded on or after July 1, 2024, § 58.1-801 A defines the property's value as its most recent property tax assessment, which eliminates the appraisal-versus-assessment dispute for newer recordings.

Citations and references

Statutes:

• Va. Code § 58.1-1821 — administrative appeal (application for correction) to the Tax Commissioner
• Va. Code § 58.1-801 — the state recordation tax (25¢/$100 on the greater of consideration or actual value); as amended by House Bill 574, Chapter 140, 2024 Acts of Assembly, effective July 1, 2024 (value = most recent property tax assessment)
• Va. Code § 58.1-814 — optional local recordation tax of one-third the state tax
• Va. Code § 58.1-802 — the grantor's tax (50¢/$500, split state/locality)
• Va. Code § 58.1-812 B — the clerk determines and collects the tax; extrinsic-evidence authority
• Va. Code § 58.1-3201 — local assessments at 100% of fair market value

Authorities the Department relied on (described here, not linked): Shoosmith Bros., Inc. v. County of Chesterfield, 268 Va. 241 (2004), and Tidewater Psychiatric Institute, Inc. v. City of Virginia Beach, 256 Va. 136 (1998) (assessed value's strong presumption); P.D. 88-317 (11/10/1988) (recent assessments presumed to reflect actual value); P.D. 91-146 (8/2/1991) (valuation is the clerk's factual determination); P.D. 00-97 (5/26/2000), P.D. 06-77 (8/23/2006), P.D. 11-191 (11/30/2011), P.D. 15-205 (10/20/2015), and P.D. 21-109 (8/24/2021) (clerks may rely on other reliable evidence of value).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 25-39

Original ruling text

March 20, 2025

Re: § 58.1-1821 Application: Recordation Tax

Dear *:

This will reply to your letter in which you request a refund of state and local recordation taxes paid by * (the “Taxpayer”) for recording a deed.

FACTS

In January 2024, the Taxpayer presented a deed for recordation to the * (the “County”). The Taxpayer provided an appraisal to the County to support a valuation that was less than the assessed value used for local real estate tax purposes. The County reduced the value for recordation tax purposes down from such assessed value, but not as low as the appraised value the Taxpayer was requesting. The Taxpayer filed an application for correction with the Department contending that the state and local recordation taxes should have been based on the consideration paid, which was equal to the appraised value, and less than the value determined by the County.

DETERMINATION

Virginia Code § 58.1-800 et seq ., imposes the state tax on the recordation of documents relating to real estate transactions. A recordation tax is imposed on any instrument admitted to record unless otherwise exempt by statute. Under Virginia Code § 58.1-801, a state recordation tax is imposed on deeds of 25¢ on every $100 or fraction thereof of the consideration or the actual value of the property conveyed, whichever is greater. Any city or county may impose a recordation tax equal to 1/3 of the amount of state recordation tax. See Virginia Code § 58.1-814. Pursuant to Virginia Code § 58.1-802, an additional grantor’s tax of 50¢ on every $500 or fraction thereof, exclusive of any lien or encumbrance remaining thereon at the time of the sale, is imposed on the greater of the actual value of the property conveyed or the consideration of the sale. The grantor's tax is divided equally between the state and the locality.

Virginia Code § 58.1-812 B provides that:

The tax on every deed, deed of trust, contract or other instrument shall be determined and collected by the clerk in whose office the instrument is first offered for recordation. The clerk may ascertain the consideration of the deed or of the instrument, the actual value of the property conveyed, and the qualification of the deed or instrument for any exemption claimed by inquiry, affidavit, declaration or other extrinsic evidence acceptable to the clerk.

In this case, the Taxpayer contends that the appraisal represents the best indication of the fair market value for purposes of the recordation tax. The assessed value is accorded a strong presumption of accuracy in determining fair market value. See Shoosmith Bros., Inc. v. County of Chesterfield, 268 Va. 241 (2004) and Tidewater Psychiatric Institute, Inc. v. City of Virginia Beach , 256 Va. 136 (1998). A clerk of a circuit court is not required to use the assessed value to the exclusion of other reliable information as to the current fair market value. If it can be shown by a clear preponderance of the evidence why the assessed value does not reflect fair market value as of the date of the transaction, the clerk has the authority to rely on such evidence to determine the proper amount of the recordation tax. See Public Document (P.D.) 00-97 (5/26/2000), P.D. 06-77 (8/23/2006), P.D. 11-191 (11/30/2011), P.D. 15-205 (10/20/2015), and P.D. 21-109 (8/24/2021).

Placing a value on real estate is entirely a factual determination that is best made by one who is thoroughly familiar with the property itself and local market conditions. This responsibility lies with the clerk when the value must be determined for recordation tax purposes. See P.D. 91-146 (8/2/1991). The Department will defer to a clerk’s determination of a property’s value unless the clerk’s valuation appears unreasonable. The mere fact that a taxpayer disagrees with a clerk’s valuation is not sufficient to show it is unreasonable.

Because Virginia Code § 58.1-3201 requires all assessments of real estate for purposes of local property taxation to be made at 100% of fair market value, it is reasonable for a clerk to presume that a recent assessment reflects the actual value of the property. See P.D. 88-317 (11/10/1988). Where the clerk has reason to believe that the assessed value does not reflect the actual value ( e.g., the assessment is not recent), the clerk should seek other evidence of the actual value.

The Department will send a copy of this letter to the Clerk of the County and request a review of the determination of the actual value of the property, taking into consideration available relevant and reliable information, including the Taxpayer's appraisal. When the County informs the Department of the correct fair market value, the Department will refund the appropriate amount of state recordation tax if warranted. A refund of the local recordation tax would then be issued by the County.

This determination is consistent with the Department’s longstanding policy that clerks have the authority to rely on additional evidence of fair market value. The parties should be aware, however, that effective for deeds recorded on or after July 1, 2024, House Bill 574, Chapter 140 of the 2024 Acts of Assembly , amended the Virginia Recordation Tax Act to define “value of the property conveyed” and “value of the interest” as the most recent property tax assessment for such property at the time the property is conveyed. See Virginia Code § 58.1-801 A.

The Code of Virginia sections cited are available online at law.lis.virginia.gov. The public documents cited are available at tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this determination, you may contact * in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at ***.

Sincerely,

James J. Alex

Tax Commissioner

Commonwealth of Virginia

AR/4902.X

Related Documents

88-317

91-146

00-97

06-77

11-191

15-205

21-109