In the Commonwealth of Virginia, a person can transfer ownership of real property to another party as a gift in multiple ways. They can use a general warranty deed, special warranty deed or quitclaim deed. These are the three basic types of deeds in Virginia.
A general warranty deed offers the receiver of the property the most protection. A quitclaim deed offers the least protection.
Types of Property Deeds in Virginia
A general warranty deed is a full warranty deed. It protects the person who receives the property (grantee) from breaches of warranties by the giver (grantor), as well as all prior owners. If there is a breach of a warranty, the grantee can file a civil lawsuit against the grantor. This is true whether the grantor caused the breach or prior owners caused the breach.
A special warranty deed protects the grantee from breaches of specific warranties caused by the grantor. It does not protect the grantee from breaches of warranties caused by prior owners.
A quitclaim deed conveys whatever interest the grantor has in the property to the grantee. It offers the grantee no protection. It does not even guarantee that the grantor has adequate title to transfer full, partial or any ownership interest in the property to the grantee. A deed of trust is a legal document similar to a mortgage. It does not transfer property as a gift to the grantee.
Definition of “Gift Deed”
A gift deed is a deed that transfers property without an exchange of money. A gift deed can take the form of a special warranty deed, general warranty deed or quitclaim deed.
It is a good idea to record a deed with the office of the city or county clerk. When recorded, the deed becomes public record and is accessible to anyone doing a title search on the property.
Form of a Deed
A gift deed, including a corrected or amended deed, may be made using the following language:
“This deed of gift, made the (insert number) day of (insert month), in the year (insert year), between (here insert the names of the grantor/s and grantee/s), witnesseth: that without consideration, the said (here insert the name of the grantor) does (or do) grant (or grant and convey) unto the said (here insert the name of the grantee), all (here describe the property or interest therein to be conveyed, including the name of the city or county in which the property is located and insert covenants or any other provisions). Witness the following signature (or signatures).”
Meaning of Consideration
The term “consideration” in this language means money. If a gift deed transfers an interest in land for money, even a nominal, or very small amount in comparison to the actual value of the land, then the deed should start with “this deed,” not “this deed of gift.”
Further, instead of the term,“that without consideration,” the deed should state, “that in consideration of (here insert the amount)...”
Covenants and Legal Descriptions
A covenant is a formal agreement to do something or not do something. In a deed, a covenant runs with the land.
For example, a description of land with a covenant could read “all land between Smith Creek and Wilson Creek in Amherst County, Virginia, which shall remain open to immediate neighbors on both sides to access these creeks.” This description of the property contains a covenant to keep the land open to immediate neighbors who can access the named creeks.
Rules for Restrictive Covenants
Virginia law provides that no deed recorded on or after July 1, 2020 can contain a reference to the specific portion of a restrictive covenant that restricts the ownership or use of the property on the basis of race, color, religion, national origin, sex, age, familial status, sexual orientation, gender identity, military status or disability.
Such restrictions are void and contrary to Virginia public policy. A city or county clerk may refuse to accept a deed submitted for recordation that references the specific portion of such a restrictive covenant.
Requirements for Preparing Deeds
A deed must be prepared by the owner of the property or an attorney licensed to practice in Virginia. The party preparing the document needs to include a contact phone number on the first page.
After a deed has been recorded, the parties named in the deed cannot be modified. If the grantor or grantee wants to change the status of title to the property, the appropriate party should create a new deed to accomplish the desired change and record it in the county where the property sits.
Attorney Should Review Deed Form
A grantor should avoid using a free printable gift deed form or a deed of gift that contains language that significantly varies from the specific language in the previous section.
A grantor with a complex piece of real property should have a real estate attorney and/or an estates and trust attorney review a gift deed form. The appropriate language in a deed differs depending on the circumstances of each situation.
That is one reason why the land records division of a county does not provide form deeds. A real estate attorney can determine if the description of the land and covenants related to it is complete. An estates and trusts attorney can tell the grantor what taxes the grantor and the grantee/s may need to pay because of the transfer.
State Recordation Tax
Virginia state law does not require the payment of a state recordation tax for a deed of gift between a grantor and grantee when there has been no transfer of consideration between the parties.
The deed must state that it is a deed of gift for the state not to require a payment. If the grantee pays consideration for the land, the state requires the payment of the state recordation tax.
The rate of tax is 25 cents on every $100, or fraction thereof, of the consideration of the deed or the actual value of the property conveyed, whichever is greater. A party can use the Virginia circuit court deed calculation page to determine how much they owe. No state recordation tax is due if the deed is exempt from taxation by law,
Federal Gift Tax
When one party transfers property to another and does not receive full consideration in return, the federal government requires that a gift tax on the transfer be paid. The term “property” here includes real property such as land and residential or commercial structures.
Generally, the donor (party giving) is responsible for paying the gift tax. Under special arrangements, the donee (party receiving) may agree to pay the tax. Gifts that are not taxable include:
- Gifts to a spouse.
- Gifts to qualifying charities. These are deductible from value of gifts made.
- Gifts to political organization.
- Gifts not more than annual exclusion for the calendar year. The annual exclusion per donee was $16,000 for 2022 and $17,000 for 2023.
Transferring With a Mortgage
The terms of a mortgage or loan may prevent a grantor from transferring the property through a gift deed or deed involving consideration. Usually, a loan is assumable; the grantee can replace the grantor as the borrower. Yet the lender usually requires that the grantee go through an application process.
A grantor who transfers real property through a gift deed of any sort risks having the lender call (immediately require the grantor to pay) the loan. The grantor will be liable for the amount remaining on the loan. The lender may be able to foreclose on the property if the grantor cannot pay off the loan right away.
Independent Legal Advice Recommended
A grantor who wants to convey property subject to a loan should first talk to a real estate attorney. The attorney can advise them on the concerns that might arise if the grantor takes this action. A prospective grantee who is invited to a meeting between the grantor and the grantor’s attorney should be mindful of the fact that the grantor’s attorney is there to solely represent the interests of the grantor.
The grantor’s attorney does not have to give legal advice to the grantee and does not owe a duty to the grantee. The grantee may want to hire their own attorney to determine how the transfer of the property subject to a loan could affect them.
If a grantor has paid off the loan on their property, the lender should ensure that it files a certificate of satisfaction to be filed in the land records with the county in which the property sits. The certificate of satisfaction should be recorded with the county.
Where to Get Legal Advice
A land records division of a county will not provide a grantor or grantee with legal advice, including advice on what language should be included in a deed and an opinion on the legal implications of language in a recorded deed.
Further, the land records division cannot provide information on foreclosure sales, form deeds and records and information about the assessed value of real estate. It also will not provide form deeds. A land records division also does not have information about real estate tax assessments nor does it have surveys or plats for individual properties.
A grantor or grantee should obtain documents relating to title from a title company. They should talk to a tax attorney or accountant about how the transfer of property through a gift deed could affect their tax obligations. A party can get tax assessment information from the Virginia Department of Real Estate Assessments.
Researching Property Records
A party can research land records documents with their county. A party can and view all land records from public kiosks in the county’s land records office for free.
The county may charge for copies. The fee varies by county. In Arlington County, the fee is 50 cents per page. Typically, viewing indexing (basic) information about a county property records is free.
Viewing images regarding land records remotely may require a subscription to a county service, which may charge a monthly fee that varies by county. For example, Arlington County uses the ROAM service, which costs $50 per month.
Alternatives to a Gift Deed
Instead of transferring property through a gift deed, a grantor can sell the property to the grantee. They can also leave the prospective grantee the property in their will. The grantor can put the property into a trust and transfer it through the trust.
Property in Intestate Estates
If the person who holds property does not leave the property in a will or trust and dies without a valid will, the property passes to family members that survive the decedent. Virginia’s intestacy statutes provide that the surviving spouse of the decedent will receive the property.
The exception is if the decedent is survived by children or their descendants and one or more of these beneficiaries are not children or descendants of the surviving spouse.
Then two-thirds of the estate, the decedent’s property, passes to the decedent’s children and their descendants. One-third of the estate passes to the surviving spouse. If there is no surviving spouse, the estate passes to the decedent’s children and their descendants.
- Administrative Code of Virginia: 23VAC10-320-20, Deeds generally
- Code of Virginia: Section 58.1-801, Deeds generally; charter amendments
- U.S. Internal Revenue Service: Frequently asked questions on gift taxes
- City of Norfolk, Circuit Court Clerk's Office, Virginia: Deeds requirements
- Code of Virginia: Section 55.1-300, Form of a deed
- Code of Virginia: Section 36-96.6, Certain restrictive covenants void; instruments containing such covenants
- Virginia's Judicial System: Circuit court deed calculation
- Code of Virginia: Section 58.1-811, Contingent expiration date — see note, exemptions
- Arlington County, Virginia: Land records division
- Code of Virginia: Section 64.2-200, Course of descents generally; right of Commonwealth if no other heir
- Arlington County, Virginia: Land Records FAQs
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.