Fillable Form R-5 - Nonresident Real Property Owner Registration (Page 2 of 2) in pdf

Nonresident Real Property Owner Registration Instructions

General

Filing Information

Fee for preparation of Form R-5: Section 6.1-2.23:2

Brokers and real estate reporting persons are required

of the Code of Virginia prohibits settlement agents

to transmit the registration forms by the 15th of the

from charging any party to a real estate transaction,

month following the month in which the closing

as a separate item on a settlement statement, a sum

occurred (sales) or the form was received from the

exceeding $10 for complying with any requirement

nonresident property owner (rentals).

imposed on the settlement agent by §§ 58.1-316 or

The penalty to the broker or real estate reporting

58.1-317.

person for failure to file is $50 per month up to a

maximum of six months.

Rentals

Nonresident payees are:

Brokers (as defined in IRS Code Sec. 6045) managing

• Individuals who are not domiciled in Virginia or

Virginia rental properties must request registration

from all existing clients.

who do not live in Virginia for more than 183 days

during a year;

Future clients must be requested to register when they

• Corporations not organized under Virginia law;

engage the broker to manage rental property.

• Estates and Trusts (1) which consists of real

Brokers must file on behalf of nonresidential property

owners (payees) who do not furnish the requested

property belonging to a nonresident individual

forms within 60 days. Brokers are only responsible for

(or Decedent), or (2) that are being administered

the information available in their records.

outside of Virginia

• Partnerships, Limited Liability Corporations, and

Nonresident owners previously registered may furnish

subsequent brokers with a copy of current registration

S-Corporations which have nonresident partners or

form in lieu of completing a new form. These copies

shareholders who receive income from the sale of

do not need to be filed with the Department by the

rental or real property located in Virginia.

broker.

Completing the Form

Nonresident owners of rental properties not managed

Items not specifically mentioned below are self-

by a broker also must comply with the registration

explanatory on the form. Each section, Parts I-IV, is to

requirement.

be filled out completely.

Sales

If the nonresident payee does not use the services of

Real estate reporting persons (as defined in IRS Code

a broker or real estate reporting person, Part V should

Sec. 6045) must request registration forms from all

not be completed. The nonresident payee should mail

nonresident sellers upon closings.

the Form R-5 or R-5E to the Department of Taxation.

If, however, nonresident payee uses a broker or real

If a client does not complete the form at closings, the

estate reporting person, Part V should be completed

real estate reporting person must complete a form on

and the nonresident payee should mail Form R-5 or

the client’s behalf. Real Estate reporting persons are

R-5E to the address given at the bottom of the Form.

only responsible for information that is available in

their files.

Gross Proceeds and Closing Date - The amount of

gross proceeds and the closing date are the same as

Sales exempt from federal and state income tax are

the information reported on Federal Form 1099-S, if

also exempt from registration; an exemption certificate

applicable.

must be completed and given to the real estate

reporting person.

Installment Sale - Generally - If at least one payment

is to be received after the close of the taxable year in

which the sale occurs (see IRS Code Sec. 453 (b)), list

the dates payments will be made.

Form R-5 - Nonresident Real Property Owner Registration Page 2

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