Today is tax day, which got me thinking about the different taxes associated with the purchase of a home. Here are two main ones.
City and State Recording Tax: When you buy a property in Virginia, the city and the state will tax you for the purchase of your home and the mortgage you obtain. These fees are part of the closing costs.
Federal Recapture Tax: Some of the loans funded by the VHDA loan program may be subject to a recapture tax. The payment is only required if the sale or transfer of the financed property is within nine years of the purchase date. A recapture tax usually affects only owners who have realized unusually rapid increases in income as well as significant appreciation in the value of the property. More information and a recapture tax calculator.
Photo courtesy of John Morgan (Flickr)