Published October 17, 2026 · Written by the Mission Realty Team.
Plenty of people still own a house in the City of Richmond, Henrico County or Chesterfield County after a job, a family move or an inheritance took them somewhere else. When it is time to sell, the first worry is usually money: does Virginia hold back a slice of the proceeds because the owner lives in another state? This post walks through what the official sources say, and where they go quiet, so you can ask the right questions before you list.
The short version from the pages we read: Virginia’s rule for nonresident sellers is a registration, not a withholding, and the federal withholding rule applies to foreign sellers, not to Americans who moved to another state. Your gain can still be taxed by Virginia, and signing from a distance takes some planning.
Are you a nonresident seller under Virginia law?
Virginia defines the term in Code of Virginia section 58.1-317. A nonresident payee includes a nonresident individual, a nonresident estate or trust, a partnership or S corporation that has nonresident partners or shareholders, and a corporation that was not formed under Virginia law. The test looks at the seller, not the house. A Richmond home owned by someone who now lives in Charlotte, or by an LLC organized in Delaware, falls inside the definition.
That wording matters for families too. A house held by an estate, by a trust with out-of-state beneficiaries or by a two-person partnership can all be treated as nonresident owners even though nobody has to move back to sell.
What the registration at closing involves
Virginia Tax’s page on registration of nonresident property owners explains the mechanics. The seller completes Form R-5, Nonresident Real Property Owner Registration. The party who collects it is the “real estate reporting person” defined in section 6045(e) of the Internal Revenue Code, which in a Virginia sale is generally the closing company handling the settlement. If the seller does not complete the form at closing, the reporting person has to complete it using only what is in its own file. Entities that own through partners, shareholders or beneficiaries use Form R-5P to list the nonresident owners.
Because the duty to file sits with the closing company, expect to see this form in your signing package, not as a separate chore. The registration is paperwork that tells the state a nonresident received payment from a Virginia sale. The state pages we read do not describe a percentage taken out of your check. Do not stop there, though. Ask the closing company, in writing, whether anything will be withheld from your proceeds, and look for the answer on the draft settlement statement before you sign. Our post on who sits at a Virginia closing table explains who is responsible for which part of that statement.
How Virginia taxes the gain
Registration is not the same as owing tax. Under Virginia’s regulation on the taxable income of nonresidents (23VAC10-110-180), a nonresident figures Virginia taxable income as if a resident, then applies the share of income that comes from Virginia sources. The regulation lists the gain on the sale of property located in Virginia as Virginia-source income, and its worked example treats a $65,000 gain on Virginia property as entirely Virginia-source. Virginia publishes a separate nonresident individual return, Form 763, for this.
Two other pieces change the size of the gain, and each has its own post. Our walkthrough of the $250,000 and $500,000 home sale gain exclusion covers the federal ownership-and-use tests, which a house you moved out of years ago can fail. The recording-side charge is covered in the Virginia grantor tax worked example. A CPA who handles Virginia nonresident returns should confirm how your own numbers fit.
Not sure what the house will net you?
Before you plan around taxes and travel, start with the number everything else hangs on. Request a free home valuation for your Richmond-area house and we will send a price opinion you can use in your planning.
When the seller is a foreign person: FIRPTA
The federal rule is separate and narrower. The IRS explains in its FIRPTA withholding page that the buyer is generally the withholding agent when a foreign person sells a U.S. real property interest, and the standard rate is 15 percent of the amount realized. A U.S. citizen or resident who simply lives in another state is not the target of that rule; it is aimed at sellers who are foreign persons for tax purposes.
The IRS describes an exception when the amount realized is $300,000 or less and the buyer will live in the home, measured by at least 50 percent of the days the property is used in each of the first two 12-month periods. The seller or buyer can also ask for reduced or no withholding by filing Form 8288-B, which the IRS says it normally acts on within 90 days of receiving everything it needs. If a foreign owner is selling, raise it before you accept an offer, because that timeline can collide with a closing date.
Signing from somewhere else
You have two main routes if you cannot be at the table. One is a power of attorney, and our post on the power of attorney at a Virginia closing covers what it can and cannot do. The other is remote online notarization. The Secretary of the Commonwealth’s 2024 Notary Handbook describes it as notarization where the signer is not in the physical presence of the notary, performed by a commissioned Virginia electronic notary over live, two-way audio and video, with identity proofing. The handbook says the act is treated as performed in Virginia where the notary is located. It does not say what happens when the signer is abroad, so if you live overseas, ask the closing company which signing method it will accept before you list.
Running a sale from a distance
The tax pieces are only part of the job. A vacant house still needs light, water and heat for showings and inspections, and who provides what in each locality differs between the city, Henrico and Chesterfield. Check with your insurer about how the policy treats a vacant home and when coverage ends after closing. Line up a local person with a key, a plan for the lawn, and a way to receive HOA documents, because the closing statement will include prorations for real estate tax and HOA dues and a mortgage payoff that moves by the day.
Many out-of-area owners find it easiest to work with a listing team that handles showings, access and paperwork locally; that is what our Sell With Us page describes. If you are also looking for a place to land, our home search shows what is on the market now.
A simple order of operations
Before listing, confirm how you hold title, decide how you will sign and ask your tax preparer how the sale reports in your home state and in Virginia. Under contract, send the closing company your correct legal name and mailing address, ask about withholding and registration in writing, and schedule signing early. At closing, read the draft settlement statement against that written answer. After closing, keep the final statement for the nonresident return for the year of sale.
Start with the free valuation
The same offer, if you skipped it above: tell us about the house and we will return a free home valuation, so you can plan the sale, the taxes and the trip with a real number in hand.
This article is general information, not legal or tax advice. For questions about your own sale, talk to a Virginia real estate attorney and a tax professional.
Frequently asked questions
Does Virginia withhold part of my proceeds because I live in another state?
The state pages we reviewed describe a registration filed through the closing company and give no withholding percentage. That is not a promise that nothing is ever held back, so ask the closing company in writing and confirm it on the draft settlement statement. Federal FIRPTA withholding is a separate rule for foreign sellers.
What is Form R-5E?
It is the exemption certificate Virginia Tax lists for sales that are exempt from federal and state income tax. The seller gives it to the real estate reporting person instead of completing Form R-5. The R-5 instructions say not to complete the registration if an R-5E exemption applies.
What if I do not fill out the registration form?
The reporting person must complete it for you using information in its files. Section 58.1-317 puts a $50 per month penalty, capped at six months, on a reporting person who files late. It also makes willfully giving false information to evade income tax a Class 1 misdemeanor, so give your correct legal name and address.
When does the form go to Virginia Tax?
Virginia Tax says the reporting person sends sales registrations by the 15th day of the month after the month of closing. You do not file it yourself in a normal closing.
Does an LLC or trust that owns the house count as nonresident?
Possibly. The definition reaches partnerships and S corporations that have nonresident partners or shareholders, nonresident estates and trusts, and corporations not formed under Virginia law. Form R-5P lists the nonresident partners, shareholders or beneficiaries. How your specific entity is classified is a question for your attorney or tax preparer.
Is Virginia taxing me twice if my home state also taxes the gain?
This post does not answer that, because we did not read the credit rules for your state. Virginia treats the gain on Virginia property as Virginia-source income, and your home state may also report the sale. Ask your tax preparer how any credit for taxes paid to another state works on your returns.
Can I skip the closing table entirely?
Sometimes. You can sign through an agent under a power of attorney or through remote online notarization with a Virginia electronic notary. Which method is available depends on the closing company, the lender and your location, so ask when the contract is signed, not the week before closing.
