[VA] What exemption code do you use on a quitclaim deed during a divorce?

Lexi, Chatbot

I understand that navigating a divorce and property matters can be quite challenging. Can you please confirm if the property in question is your primary residence?

Lexi, Chatbot

Have you already filed for divorce, and is the quitclaim deed part of the divorce settlement agreement?

Lexi, Chatbot

Is there anything else the Real Estate Lawyer should know before I connect you? Rest assured, they'll be able to help with your quitclaim deed.

Jon

Hello, and thank you for reaching out! I'm Jon, a licensed attorney with over 13 years of experience, here to help. I understand legal matters can feel overwhelming, but you're in good hands. My goal is to explain things clearly and guide you toward the best possible solution for your situation. Just a quick note: our conversation is for general legal information only and does not create an attorney-client relationship.

Jon

What state is the property located in?

Jon

Thank you. Is there an outstanding mortgage on the property, or is it owned free and clear?

Jon

And is your spouse listed on the mortgage as well, or just on the deed?

Jon

Has your lender provided any specific requirements or forms for removing your spouse from the deed during the refinance process?

Jon

Understood! Is there anything else you would like to add before I start working on your answer?

Jon

Got it! I just need a few minutes to put together a complete response. Thanks so much for waiting.

Jon

In Virginia, transferring property between spouses or former spouses during a divorce is a routine process, and the law provides exemptions so you do not have to pay unnecessary recordation taxes.

Since your transfer is part of a divorce settlement, the exemption that applies to your situation is found in Virginia Code Section 58.1-811(A)(15). This law says that deeds are exempt from recordation tax when they are "released or recorded pursuant to a decree of divorce or of separate maintenance or pursuant to a written instrument incident to such divorce or separation." Your settlement agreement is a written instrument incident to your divorce, which qualifies under this exemption.

On the Virginia Land Record Cover Sheet, enter the code 58.1-811(A)(15) into the Grantee Exemption box. In Virginia, the recordation tax is legally the responsibility of the grantee (the person receiving the interest), so placing the code in that box tells the clerk not to charge you the tax. You should also include the following statement on the first page of the deed itself: "This deed is exempt from recordation tax under Va. Code Section 58.1-811(A)(15) as a transfer incident to divorce."

Do not use Section 58.1-811(A)(3), as that exemption applies only to transfers to the government.

Using this code should exempt you from the state recordation tax. Keep in mind there may still be a small clerk's fee, usually between $20 and $50, and in some counties a nominal transfer fee of around $1.

Since you are refinancing, your title company typically handles recording the quitclaim deed as part of the closing process. Ask your loan officer if the title company can include the recording in their closing package to ensure it is filed correctly and that the lender gets confirmation immediately.

As a 100% disabled veteran, you may also be entitled to a full property tax exemption on your primary residence under Virginia Code Section 58.1-3219.5. This does not affect the recordation tax process, but make sure you have applied for this benefit with your local Commissioner of the Revenue if you have not already done so.

Jon

Actually, you generally only need to list it once, but it must be in the correct tax box on the cover sheet to cover the entire transaction. Place it in the Grantee Exemption box, as that is the one that actually waives the primary recordation fees. Some people also put it in the Grantor box to be safe, but the Grantee box is the critical one.

Jon

In Virginia, use Va. Code Section 58.1-811(A)(15). Do not use (A)(3), as that is only for transfers to the government. Since your transfer is part of a divorce agreement, (A)(15) is the correct code. Place this code in the exemption box on the land record cover sheet and also type a statement at the top of the first page of the deed stating: "This deed is exempt from recordation tax under Va. Code Section 58.1-811(A)(15) as a transfer incident to divorce." Since you are currently refinancing, send this document to your title company so they can record it alongside your new mortgage.

Jon

On the Virginia Land Record Cover Sheet, enter the code 58.1-811(A)(15) into the Grantee Exemption box. In Virginia, the recordation tax is legally the responsibility of the grantee, so placing the code in that box is what tells the clerk not to charge you the tax. While some people also put it in the Grantor box to be safe, the Grantee box is the one that actually waives the primary recordation fees. Just ensure you also include the mandatory exemption statement on the first page of the deed itself so the clerk can verify the code you used on the cover sheet.

Jon

It does not matter if the divorce is not yet final. Virginia Code Section 58.1-811(A)(15) specifically allows for the exemption if the deed is recorded pursuant to a "written instrument incident to such divorce or separation." Since you have a signed settlement agreement, that counts as the written instrument. You do not need to wait for the judge to sign the final decree.