Virginia LLC structure and cost: a protected series statute, and a transfer tax you can skip by keeping half your own LLC

Virginia does two things on the structure side worth planning around. It authorizes protected series LLCs, so a single entity can hold multiple properties in walled-off series, which most states in this series do not allow. And while it taxes ordinary real estate transfers through a recordation tax and a grantor tax, it exempts one specific move that owners make constantly: contributing real estate into an LLC you control. The exemption has a bright-line condition, 50% of the profits, and knowing exactly where that line sits is the difference between a tax-free contribution and a taxable one. Take the transfer taxes first, because the exemption is the useful part.

The transfer taxes, and the exemption that skips them

Virginia taxes deeds on two tracks, and then carves out the contribution into your own entity.

Virginia charges a 0.25% recordation tax and a 0.1% grantor tax on deeds, with extra grantor taxes in Northern Virginia and Hampton Roads.

On an ordinary sale, Virginia imposes a state recordation tax of $0.25 per $100 of value under Va. Code § 58.1-801, a grantor’s tax of $0.50 per $500 under § 58.1-802, and localities may add up to a third of the recordation tax. In the Northern Virginia and Hampton Roads regions, additional regional grantor taxes apply on top. None of it is as steep as Washington’s graduated excise tax, but it is a real closing cost, and it is where the exemption below earns its keep.

Moving real estate into an LLC is exempt from recordation tax when the grantor keeps at least 50% of the LLC’s profits and surplus, and taxable the moment the share drops below 50%.

Va. Code § 58.1-811(A)(10) exempts from recordation tax a deed conveying real estate to a partnership or LLC when the grantors are entitled to receive at least 50% of the profits and surplus of that company. That covers the common move, an owner contributing a property into an LLC they control, and does it tax-free on the recordation side. The trap is the threshold. In a Virginia tax ruling, a grantor who contributed property but retained only 42% of the resulting entity did not qualify, and the recordation tax applied to the whole transfer. So the exemption is a bright line: keep 50% or more of the profits and surplus and the contribution is exempt; take back 49% and it is taxed. Anyone syndicating a property, bringing in investors, or restructuring ownership in the same transaction that contributes the real estate has to watch that line, because the tax turns on the profit share the contributing owner walks away with, not on the fact that a contribution happened. The nexus and foreign qualification guide covers where an entity legally lives; the Virginia point is that the cost of moving property into an entity is zero or real depending on one percentage.

The protected series Virginia allows

Virginia is one of the states that lets a single LLC wall off its assets internally.

Virginia authorizes protected series LLCs, so one entity can hold multiple properties in series a creditor of one cannot reach across.

Virginia adopted a protected series regime in Va. Code § 13.1-1088 and following, so a Virginia LLC can establish protected series, each holding its own assets, with the goal that a creditor of one series cannot reach another’s. Establishing a protected series requires the unanimous consent of the members. This is the modern, uniform-style version of the series concept, and it puts Virginia with Colorado among the states in this series that offer it, and apart from Pennsylvania, Michigan, Arizona, and Washington, which do not. The trade-off is the usual one: the inter-series shields are newer and lightly tested, so an owner should treat the walls as strong on paper and unproven in litigation, especially in an out-of-state court. The series LLC guide covers the form and its untested edges.

What the public record shows

Virginia offers moderate privacy at formation.

Virginia’s articles require a registered agent and an organizer but not a member roster, so ownership can stay off the public formation record.

The Articles of Organization filed with the State Corporation Commission name a registered agent and the organizer and give the principal office, but they do not require a list of members, so a member can stay off the public formation record by using a third-party organizer and a commercial registered agent. That puts Virginia ahead of a full-disclosure state like Arizona and short of Wyoming or New Mexico, where no owner name is ever required. Virginia has no land-trust regime, so the anonymous LLC structures that create real privacy involve a holding entity, often formed elsewhere, as the member of record.

State tax on the LLC

Virginia’s income tax is one of the few graduated rates among the states this site has covered.

Virginia taxes pass-through income at a graduated rate topping out at 5.75%, not a flat rate, and charges no franchise tax.

A pass-through Virginia LLC pays no franchise tax, and its income lands on the members at Virginia’s graduated individual rates, which reach 5.75% at a low income threshold, so most business income is taxed at the top rate. That is a different posture from Arizona’s flat 2.5% or Colorado’s flat 4.4%, and it matters for a high-earning owner comparing states. Virginia offers an elective pass-through entity tax that lets the LLC pay the members’ Virginia tax at the entity level and take the federal deduction, filed on Form 502PTET. An LLC electing C-corporation treatment pays Virginia’s corporate income tax instead. The filing page covers formation and the annual registration fee.

The bottom line

Virginia authorizes protected series LLCs under Va. Code § 13.1-1088, one of the states in this series that does, though the inter-series shields are lightly tested.

Virginia taxes deeds through a 0.25% recordation tax and a 0.1% grantor tax, with regional add-ons in Northern Virginia and Hampton Roads.

Contributing real estate into an LLC is exempt from recordation tax when the grantor keeps at least 50% of the profits and surplus, and taxable below that line, so the exemption turns on one percentage.

Ownership can stay off the public formation record because the articles require an organizer and agent but not a member roster.

Virginia taxes pass-through income at a graduated rate up to 5.75%, not a flat rate, and charges no franchise tax.

What this page does not cover

This page is about where the entity lives and what it costs to hold and move. How creditors reach a member’s interest, the confirmed no-foreclosure charging order, and the entireties shield are on the protection page. The default governance rules and the freedom-of-contract rule that turns on eight words are on the governance page. The formation fee, the annual registration fee that is not a report, and the filing details are on the filing page.

Last verified August 2026.