Three Ways to Reach Your Equity, Three Virginia Tax Rates
Program and regulatory figures verified September 19, 2026. Details change; confirm your scenario with us.
A bridge loan and a cash-out refinance can put the same money in your hands and be taxed at different rates in Virginia. Very few people are told this before they choose.
The three routes, and what each one costs
Virginia taxes the instrument you record rather than the transaction you had in mind. Three instruments, three treatments.
New debt. A bridge loan secured by the departing residence, or a home equity line you are opening for the first time, is new debt. Under § 58.1-803(A) the rate is 25 cents on every $100 or portion thereof of the obligation secured. Add a locality's one-third under § 58.1-814 and the combined figure is about 33 cents per $100, or roughly $3.33 per $1,000.
Refinancing. Where the deed of trust secures the refinancing of an existing debt, and the tax on that original debt has already been paid, § 58.1-803(E) substitutes a reduced graduated schedule: 18 cents per $100 on the first $10 million, 16 on the next $10 million, 14 on the next, 12 on the next, and 10 cents on everything above $40 million. With the local third that is about $2.40 per $1,000.
Supplemental. Where an instrument supplements an existing deed of trust, the tax is paid only on the portion of the face amount that is in addition to the original amount. The supplemental instrument has to document the prior instrument's reference number and original principal. So increasing an existing deed of trust is taxed on the increase alone.
What that looks like on a real number
Take $300,000 of equity you want to reach.
- As a new deed of trust: $750 in state recordation tax, plus about $250 if your locality imposes the full third, so around $1,000.
- As a refinance of existing taxed debt: $540 state, plus about $180 local, so around $720.
- As a supplemental raising an existing deed of trust by $300,000: taxed on the $300,000 increase only, at the rate applicable to that instrument.
Those figures are the two state taxes and a full local third. They exclude clerk fees, title charges and anything your lender charges, all of which are separate and often larger.
The point is not that one route is always cheapest. It is that the routes are priced differently and the difference is knowable in advance. Run your own numbers on the recordation tax calculator.
The catch worth naming
The cheapest recording route is not automatically the best financing. A refinance of your existing first mortgage replaces a loan you may not want to replace. A supplemental depends on the existing instrument and the existing lender being willing. A new deed of trust is the most flexible and the most expensive to record.
What we do is put the recording cost alongside the other costs rather than letting it be discovered at closing. On a $300,000 draw the spread between routes is a few hundred dollars, which is real but is not usually the deciding factor. On larger amounts it grows, and in Northern Virginia where the conforming ceiling reaches $1,249,125, larger amounts are common.
The other two taxes, on the purchase itself
Two more sit on the buy side rather than the loan.
State recordation tax on the deed is 25 cents on every $100 or fraction of the consideration or actual value, whichever is greater (§ 58.1-801). And the grantor's tax under § 58.1-802 is 50 cents on every $500 or fraction of the greater of actual value or consideration, exclusive of any lien or encumbrance remaining at the time of sale, divided equally between the state and the locality.
That last clause is worth reading twice if you are selling. The grantor's tax is measured exclusive of liens remaining on the property, which is not the same base as the sale price.
Who actually determines this
Your closing agent and the clerk of court apply the statute to the specific instrument being recorded. We are not determining your tax and this page is not a ruling. What we can do is make sure the question gets asked while you still have a choice of structure, rather than after the instrument is drafted.
Compare the structures on the structures page, or see the product-level version on line versus term.
Local relief ordinances, recordation treatment of a specific instrument, and landlord obligations are legal and tax questions. Your commissioner of the revenue, your CPA or a Virginia attorney, and your closing agent own those answers. We flag them because they change the numbers we underwrite.
Frequently asked questions
What is Virginia's recordation tax on a deed of trust?
25 cents on every $100 or portion thereof of the amount of the obligation secured, under Va. Code § 58.1-803(A). A locality may impose an additional recordation tax equal to one-third of the state amount under § 58.1-814, bringing the combined figure to roughly $3.33 per $1,000.
Does Virginia tax a refinance at a lower rate?
Yes. Where the deed of trust secures the refinancing of an existing debt on which the tax has already been paid, § 58.1-803(E) applies a graduated schedule starting at 18 cents per $100 on the first $10 million, then 16, 14 and 12 cents on each successive $10 million and 10 cents on all over $40 million.
How is a supplemental deed of trust taxed in Virginia?
Only on the portion of the face amount that is in addition to the original amount, under § 58.1-803, provided the supplemental instrument documents the prior instrument's reference number and original principal. Increasing an existing deed of trust is therefore taxed on the increase rather than the whole balance.
Is there a maximum Virginia recordation tax?
No stated maximum. The statute applies graduated rates based on the value of the obligation secured rather than capping the total, so the tax scales with the amount recorded.
What is Virginia's grantor's tax?
50 cents on every $500 or fraction of the greater of the actual value of the property or the consideration for the sale, exclusive of any lien or encumbrance remaining on the property at the time of sale, divided equally between the state and the locality, under Va. Code § 58.1-802.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. Local tax relief ordinances, recordation treatment, and landlord obligations change and depend on your facts; your commissioner of the revenue, your CPA or a Virginia attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.