Nonresident individuals, nonresident estates and trusts, partnerships, and S corporations which have any nonresident partners or shareholders, and corporations which are not formed or organized under Virginia law that rent or sell real property in Virginia are required to register with Virginia Tax.
"Brokers," as defined in the Internal Revenue Code Section 6045(c), including realtors and property management firms, are required to obtain a registration form from each nonresident of Virginia who receives $600 or more annually from the real property. "Real estate reporting persons" as defined in the Internal Revenue Code Section 6045(e) are required to obtain a registration form from each nonresident seller of real estate. Sales of real estate not subject to the Virginia income tax are exempt from registration.
Filing Procedure: Brokers and real estate reporting persons must submit completed registration forms to Virginia Tax by the 15th day of the month following the month in which the forms were received from the owner (in the case of rental property) or the date of closing (in the case of property sales). If a nonresident property owner fails to complete a registration form within 60 days after being requested to do so by the broker or at the time of closing, the broker or real estate reporting person must complete a registration on behalf of the property owner.
How to Register
- Nonresident Real Property Owners should complete Form R-5.
- Partnerships, S-Corporations, Estates, and Trusts must provide the information on all nonresident partners, shareholders, and beneficiaries on Form R-5P. Substitute schedules may be used provided they follow the same format.
Sales exempt from federal and state income tax are also exempt from registration. An exemption certificate Form R-5E must be completed and given to the real estate reporting person.