Total property taxes for residential single-family properties rose by 6.9% in 2023, which unfortunately increased the burden of property tax considerations for those deciding to move homes.
When was the last time you did some preparatory reading on property taxes in your area? Are you prepared for fluctuating rates?
Read on as we explore the current state of Virginia Beach property taxes and what role they may play when selling your home.
What Are Virginia Beach Property Taxes?
Virginia Beach property taxes are applied based on your property’s value. For each $100 of your property’s value, you must pay a certain figure on property taxes. However, this rate will differ depending on which Special Service District you live in.
Here’s what you’ll owe in property taxes for each Special Service District (SSD) in Virginia Beach:
| SSD | Tax Paid (Per $100 Of Property’s Value) |
| General | $0.99 |
| Sandbridge | $1.00 |
| Central Business District South | $1.44 |
| Old Donation Creek | $1.174 |
| Bayville Creek | $1.462 |
| Shadowlawn | $1.1494 |
| Chesopeian Colony | $1.2813 |
| Harbour Point | $1.11 |
| Gills Cove | $1.053 |
| Hurds Cove | $1.428 |
| Schilling Point | $1.394 |
Living in Virginia gives you the soothing advantage of lower property taxes, which is a significant factor to consider when purchasing your next home.
The Virginian property tax rate is well below the national average of 0.99%, with a generous 0.75%. This is just one of the many inspiring perks that make Virginia Beach an idyllic place to live (without even mentioning the breathtaking beaches).
What Do Property Taxes Mean When Selling Your Home?
Now that you know the rates for your area, let’s discuss everything that might imminently surprise you about property taxes when moving homes.
Capital Gains Tax
If you have lived in your home for over 2 years, you will thankfully and fairly not be required to pay capital gains tax on a profit below $250,000. Since this is quite a significant profit, most homeowners don’t need to pay capital gains tax when modestly moving home in a conventional context.
However, if you’ve lived in your home for less than a short 2 years, you should be prepared and ready to pay a capital gains tax of around 5.7% on your profit amount.
If you are married, you have the added bonus of an extra capital gains allowance of up to $500,000 tax-free.
Payment Dates
Selling up in Virginia Beach means paying especially diligent attention to the property tax payment dates. The payment dates are bi-annual, with the first payment due before June 5, and the second payment due before December 5 for a summer-winter split.
It’s ideal to have these funds set aside to easily cover the second payment of your property taxes. If you have a mortgage lender, they will conveniently make these payments on your behalf using your escrow account. However, if you do not have a mortgage lender, you should take the time to make these payments yourself by sending funds to the City Treasurer.
Property Tax Transfer
Should you pay the whole of the half-year when settling your property taxes before selling? No. As soon as you close the sale on your property, the property taxes become the responsibility of the new homeowner, and you only owe the payments required up to that date. The new owner will then resume the payments.
Owning Multiple Homes
If you’re blessed enough to sell a second property, vacation home, or property that is not your main residence, you are unfortunately not exempt from property gains tax. However, if you are selling your main residence, you won’t have to pay.
This means that if you are selling a second home, you should deduct 5.7% from your predicted sale profits.
Grantor Tax
Although the buyer conveniently covers most of the transfer tax fees for the property’s sale, you still have added financial responsibility regarding grantor tax.
You should expect to pay around 0.1% of the property’s value, or $1 per $1,000. Setting these funds aside before you embark on the selling process is highly advised.
Why Is It Important To Consider Property Taxes Before Selling?
Before selling your primary residence, you need to create a budget for your next Virginia Beach home or simply determine your profit margin from the sale. If you do not have an awareness of your capital gains responsibilities, you will have a limited understanding of your profits, which makes budgeting for your next home more vague.
Additionally, you must settle what you owe in property tax leading up to the sale date. But what happens if you haven’t paid your property taxes?
If you fail to make property tax payments, your home could be foreclosed or repossessed, which can be a highly traumatic experience. Or, the IRS will seize the home’s value and you must repurchase it in order to reclaim the property, in a process called tax liens.
Summary
Selling a home is no easy feat, and research is your ally throughout the process. By preparing your property tax expectations, you can ensure a smooth sale with no unexpected costs, fully comprehending your payments and responsibilities. With these property tax considerations in mind, is the present an ideal time to sell your Virginia Beach home?
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