Virginia Commercial Real Estate Loans: Recordation Tax & C-PACE

Commercial property loans in Virginia use the same programs as every other state — SBA 504, DSCR loans, bridge loans, bank and life-company permanent loans. What Virginia changes is a recordation tax on both the deed and the deed of trust, with a local add-on where a city or county adopts it, a separate grantor tax on the seller, a foreclosure process that runs through a trustee instead of a court, and C-PACE programs that need the existing lender to subordinate.

Recordation tax on the deed and the loan

Virginia's recordation tax is charged when documents are recorded with the circuit court clerk. The deed is taxed at 25 cents per $100 of the price or the property's value, whichever is greater — and for deeds recorded since July 1, 2024, value means the most recent property tax assessment, so a sale below assessment is still taxed on the assessment. The deed of trust that secures the loan is taxed separately at the same 25 cents per $100 of the amount it secures, with a reduced tiered schedule on the portion above $10 million. Cities and counties may add their own recordation tax equal to one-third of the state tax.

The seller has a separate tax. The grantor tax is 50 cents per $500 of the price or value, after subtracting any liens that stay on the property, and the statute puts it on the grantor unless the parties agree otherwise. Localities in the Northern Virginia Transportation Authority also collect a regional congestion relief fee from the grantor — ask the clerk for the rate in effect when you record.

Example: a $2,000,000 commercial building bought with a $1,400,000 loan, in a city or county that imposes the local tax, with no liens assumed.

• State recordation tax on the deed: $2,000,000 × 0.25% = $5,000; local one-third: $1,666.67
• State recordation tax on the deed of trust: $1,400,000 × 0.25% = $3,500; local one-third: $1,166.67
• Recordation taxes in total: $11,333.34
• Grantor tax, paid by the seller: $2,000,000 ÷ $500 × $0.50 = $2,000
• All together: $13,333.34, before any Northern Virginia regional fee

That is well below the $30,000 conveyance tax on the same sale in Connecticut and the $21,700 in state taxes outside Miami-Dade in Florida. The difference is where the tax lands: about $4,666.67 of Virginia's total is on the loan, so it grows with the amount you borrow, and it comes back each time a new deed of trust is recorded — including a refinance, at a reduced rate when the debt being refinanced was already taxed.

Trustee sales — and short notice on commercial property

Virginia commercial loans are secured by a deed of trust, and a default ends in a sale by the trustee rather than a court case. Before the sale, the trustee must advertise it in a newspaper — as often as the deed of trust provides, within the statute's minimums, or once a week for four successive weeks if the deed of trust is silent — and mail written notice of the time, date and place of the sale. For a deed of trust that is not on an owner-occupied home, notice to the owner — and to subordinate lienholders whose deeds of trust were recorded at least 30 days before the sale — is due only 14 days before the sale. Homes get 60 days; commercial owners do not.

Because the timeline is that short, a business owner who sees trouble coming should talk to the lender, or start a refinance, long before a notice arrives. Read the personal guarantee you sign with the same care — on a non-recourse loan, read the carve-outs that would turn recourse back on.

C-PACE: local programs and a statewide option

Virginia's C-PACE law, § 15.2-958.3, lets each city or county create a program by ordinance. The owner repays the financing through a voluntary special assessment on the property, and the eligible work goes beyond energy efficiency to renewable energy, water efficiency, resiliency, stormwater management, environmental remediation and electric vehicle charging. A locality can run its own program or join the statewide program that Virginia Energy sponsors; that program launched in September 2022 and is administered by the Virginia PACE Authority.

The lien has the priority of a property tax lien, but it moves ahead of an earlier mortgage or deed of trust only if each holder signs a written subordination agreement that is recorded with the C-PACE lien. Before recording, the owner must also show the locality that mortgage and property tax payments are current. C-PACE Desk, a BestLoanUSA site, tracks Virginia's C-PACE status. If you already have a loan on the building, bring that lender in at the start — without its subordination agreement the C-PACE lien cannot rank ahead of the existing mortgage.

Where to start

Choose the program — SBA 504 for an owner-occupied building, a DSCR loan or permanent loan for an income property, a bridge loan for a transition — and include the recordation tax on the loan amount in your closing costs. Size the loan with the commercial mortgage calculator. For financing that isn't tied to real estate, the Virginia business loan guide covers SBA offices and state programs.

Ready to compare? Start a commercial real estate loan request — one application, compared across our lender network.

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Sources: Va. Code §§ 58.1-801, 58.1-802, 58.1-803 and 58.1-814 (Recordation Tax Act); Va. Code §§ 55.1-321 and 55.1-322; Va. Code § 15.2-958.3; Virginia Energy, Commercial PACE program; Va. Code § 58.1-802.4 and Northern Virginia Transportation Authority, revenue estimates. Checked 2026-10-12.