Rental Property Taxes in Virginia (2026 Guide)

1. Property Tax in Virginia

Virginia property tax is locally administered (no state real-estate tax) and assessed at 100% of fair market value (Code §58.1-3201), with a statewide average effective rate around 0.7%–0.8%. Reassessment frequency varies — cities typically every 2 years, counties every 3–4.

• No relief for rentals — the elderly/disabled relief applies only to an owner’s sole dwelling.
• Local business tangible personal property (TPP) tax — if your rental rises to a trade or business (notably furnished or short-term rentals), localities can tax your furniture, appliances, and fixtures via a business personal-property return. It’s easy to overlook.

2. Virginia State Income Tax on Rental Income

Virginia’s income tax is graduated with a top rate of 5.75% (2% / 3% / 5% / 5.75% over $17,000), using one schedule for all filing statuses. VA taxable income starts from federal AGI, with a standard deduction of $8,750 single / $17,500 MFJ (2025+).

• No capital-gains preference — gains are taxed as ordinary income up to 5.75% (the narrow long-term subtraction is for qualified tech/startup investments and does not apply to rental real estate).
• Fixed-date conformity — Virginia now conforms to the IRC as of December 31, 2025 (Tax Bulletin 26-1), so post-cutoff federal changes aren’t automatically adopted.

3. Bonus Depreciation Decoupling

Virginia does not conform to federal bonus depreciation (§168(k)) and requires an add-back. Your federal return keeps the bonus deduction, but for Virginia you reverse it and depreciate on a regular method — a federal-vs-VA basis difference to track.

4. The Transfer-Tax Stack

Virginia stacks a few charges on a sale rather than one transfer tax:

• State recordation tax — $2.50 per $1,000 (0.25%), §58.1-801.
• State grantor tax — $1.00 per $1,000 (0.10%), paid by the seller, §58.1-802.
• Local recordation tax — up to one-third of the state rate (~$0.833 per $1,000), §58.1-814.
• Northern Virginia add-on — two regional grantor-style fees add about another 0.10% in NoVA.

All in, the stack runs roughly 0.33%–0.43% of price, with the grantor portion falling on the seller and recordation often negotiable.

5. LLC Fees (No Annual Report)

A Virginia LLC pays a $50 annual registration fee to the State Corporation Commission, due by the last day of the LLC’s anniversary month. There’s no full annual report — just the fee.

6. Rent Control

Virginia has no rent control. As a Dillon Rule state, localities have only the powers the General Assembly expressly grants, and no enabling legislation for rent control exists — so a local rent-control ordinance would be invalid. You set rents at market.

7. Security Deposit Rules

Virginia’s Residential Landlord and Tenant Act (§55.1-1226) sets the deposit rules:

• Cap of 2 months’ rent.
• Return within 45 days of termination/move-out, with a written itemization of any deductions.
• Interest not required — the recodified statute dropped the former interest requirement.

8. How SheltrIQ Helps Virginia Landlords

SheltrIQ keeps your federal and Virginia returns aligned and surfaces the easy-to-miss items:

• Bonus-depreciation tracking — flags the VA add-back and keeps a separate Virginia depreciation basis.
• Depreciation schedules — builds 27.5-year MACRS and tracks improvements and personal property.
• AI Schedule E classification — sorts each expense to the right line so your VA income starts from an accurate federal return.
• Deadline reminders — keeps the $50 anniversary-month registration and estimated-payment dates on your radar.