New Year - New Tax - Well, maybe…
January 2nd, 2008 Categories: Alexandria Dirt, Arlington Dirt, Falls Church Dirt, McLean Dirt, Northern Virginia Home Selling, Northern Virginia Real Estate Dirt, Reston Dirt
Happy New Year! I wish all of you a tremendously successful, prosperous, healthy and happy 2008!!!
A little history: As many of you know, the Virginia General Assembly last year granted 2 Transportation Authorities in Virginia the right to impose a 
special new tax to help relieve traffic congestion. One here in Northern Virginia and the other in the Tidewater Region. It’s an addition to the Virginia Grantor’s Tax that has always been collected. The kicker is that this new tax represents a 500% increase over what a seller would have paid had they settled in 2007.
What does this mean? For example, when selling a $500,000 property in 2007 (or years prior) the Grantor’s Tax collected at settlement would have been $1/$1000, or $500. However, The Virginia Transportation Authority in 2007 decided that an increase would take place of an additional $4/$1000 bringing the total now to $5/$1000 or a whopping $2,500.
So many sellers were trying to get deals done at the last moment in 2007 to save this tax increase. What many don’t know is that there is a group in Virginia who feel that it is unconstitutional to grant a non-elected body the right to impose a tax – so the case is being brought before the Virginia Supreme Court next week and it’s trying to be overturned.
Now who really knows what will happen… The Tidewater Transportation Authority has decided to delay the collection of this tax increase saving themselves an accounting nightmare if the Supreme Court in fact rules that this body cannot impose the tax. Here in Northern Virginia, they are moving forward with the collection of this new tax. As it stands, many in the know say this is not likely to be overturned and we should just get over it and live with this expected increased tax. At least it wasn’t the increase of $9/$1000 that they originally proposed!!! Whew…
What do I think? I think we have to wait and see. If you’re a seller - you just have to figure it into your costs and move forward with your transaction if you’re fortunate enough to get a good contract. If you’re a buyer - it has no impact on you whatsoever.
I’ll certainly keep my readers informed as to the direction the supreme court rules and what we can expect as an impact. Meanwhile, let’s start talking about buying and selling. No time like the present!
Happy Wednesday!
Copyright © 2007 Arlington Dirt Real Estate Blog 
Jennifer - yikes 500% increase in taxes will certainly surprise some of the Arlington Virginia home sellers. Hope they’re working with you and reading your blog - that’s the kind of surprise that can kill a deal! - Looking forward to hearing more. - Cyndee Haydon
Tried to “share” it and nothing would happen? thought I would be a great digg submission. Am I doing something wrong?
hmmm, no idea on the sharing thing - maybe someone on the forum can help?
Thanks for the kind words - we’ve known about the increase for a while, so hopefully none of my sellers will be surprised - but still - not fun at all.
[…] as we suspected (and as I’ve previously written about), it was ruled by the Virginia Supreme Court to be unconstitutional to enable a […]