West Virginia
A 1031 exchange in West Virginia needs the intermediary's letter three weeks before closing.
West Virginia withholds from nonresident sellers unless the Tax Division has issued an exemption certificate, and for a 1031 exchange the application must include a letter from your qualified intermediary and arrive at least 21 days before closing.
If you do not live in West Virginia and you sell West Virginia real property, the person in charge of reporting the closing has to withhold either 2.5% of your total payment or 4.58% of your estimated capital gain, unless the Tax Division has issued you a certificate of exemption. For a 1031 exchange you can apply for one on Form NRAE with a letter from your qualified intermediary, and the form must be received at least 21 days before closing.
onezero3one acts as qualified intermediary for exchanges of West Virginia property, subject to a review of each file before an exchange agreement is signed. We work with your closing agent and tax advisor; we do not give tax or legal advice.
What is specific to this state
The federal rules in IRC §1031 decide whether an exchange qualifies. The items below are state requirements that sit alongside them at closing or on the return. Each links to the official source it was checked against; confirm the current version with your closing agent and tax advisor before relying on it.
| Issue | What applies | Usually handled by | Source |
|---|---|---|---|
| Tax at closing for sellers | West Virginia requires withholding on sales or exchanges of West Virginia real property by a nonresident individual or entity: either 2.5% of the total payment or 4.58% of the estimated capital gain, withheld by the person in charge of reporting the real estate transaction before the deed is presented for recording. The statute's text still shows 6.5% of gain; the Tax Division's April 2026 guidance and current forms use 4.58%. Nonresident individuals and entities (an entity with a current West Virginia business registration certificate is not subject). | Closing attorney, title company, lender or broker (the buyer only if none is involved) | West Virginia Tax Division, TSD 389 (Rev. April 2026); W. Va. Code 11-21-71b Checked September 30, 2026 |
| Exchange exemption and intermediary letter | Form NRAE has a specific line for a tax-free exchange under IRC 1031. The required documentation is a letter signed by the qualified intermediary (or the person authorized to sign for the business entity) stating the transferor names, property description, that it acts as qualified intermediary in a 1031 exchange of the property, and whether there is boot and how much. The amount of any boot must be entered as the taxable amount. Nonresident sellers of West Virginia real property in a 1031 exchange. | Seller files the NRAE with the intermediary's letter; closing agent receives the certificate | West Virginia Tax Division, Form WV NRAE and instructions (Rev. 09/2026), line 8 Checked September 30, 2026 |
| 21-day deadline | The NRAE must be received by the Tax Division no later than 21 days before the closing date; a separate NRAE is needed for each seller who receives proceeds (spouses filing a joint return excepted). Nonresident sellers seeking a certificate of full or partial exemption. | Seller | West Virginia Tax Division, Form WV NRAE (Rev. 09/2026); TSD 389 (Rev. April 2026) Checked September 30, 2026 |
| Exceptions to withholding | The statute and TSD 389 list six exceptions, including a certificate issued by the Tax Division stating that no tax is due, that a reduced amount is due, or that the transferor has provided adequate security. A 1031 exchange is not a separate exception, so the NRAE certificate is the route. Nonresident sellers. | Seller obtains certificate; closing agent collects any reduced amount before recording | West Virginia Tax Division, TSD 389 (Rev. April 2026) Checked September 30, 2026 |
| Filing and refund forms | The withholding agent files Form NRSR with check or money order within 30 days of the date the tax was withheld. A seller can apply for an early refund on Form NRER, not before 30 days after the effective date of transfer or after December 15 of the year of sale, and must file the appropriate West Virginia income tax return to obtain the refund. Withholding agents and nonresident sellers. | Closing agent (NRSR); seller (NRER) | West Virginia Tax Division, TSD 389 (Rev. April 2026) Checked September 30, 2026 |
| Transfer tax on the deed | The state excise tax on the privilege of transferring title is $1.10 per $500 of value, plus a $20 fee on transfers for consideration, plus a county excise tax that counties may set up to $1.65 per $500. The grantor pays unless the grantee accepts the document without the tax having been paid. Every West Virginia deed, including both deeds in an exchange. | Closing agent, under the contract's allocation | W. Va. Code 11-22-2 Checked September 30, 2026 |
| Transfer tax and exchanges | The 16 items excluded from the definition of 'document' in 11-22-1 (wills, deeds of partition, leases, mergers, certain family transfers without consideration, transfers to or from government, mortgages and similar) do not include like-kind exchanges or exchange intermediaries. Sale and purchase deeds in a West Virginia exchange. | Closing agent, under the contract's allocation | W. Va. Code 11-22-1 Definitions Checked September 30, 2026 |
| State income tax treatment | For a resident individual, West Virginia adjusted gross income starts from federal adjusted gross income with specified modifications, so federal 1031 deferral carries through unless a modification applies. No clawback or annual reporting rule for replacement property was verified. West Virginia resident individuals; nonresident treatment not verified. | Your tax advisor | W. Va. Code 11-21-12(a) Checked September 30, 2026 |
The 21-day clock nonresident sellers miss
Form NRAE, the application for a certificate of full or partial exemption, has a line for a tax-free exchange under §1031. The instructions require, with the application, a letter signed by the qualified intermediary that:
- names the transferor or transferors;
- describes the property;
- states that the intermediary is acting for the transferor in a 1031 exchange of that property; and
- states whether there will be boot and, if so, how much.
The amount of any boot must be entered on the application as the taxable amount. The form must be received by the Tax Division no later than 21 days before the closing date, and a separate NRAE is needed for each seller who receives proceeds. The exchange agreement and the intermediary's letter therefore need to be ready more than three weeks before a West Virginia closing.
Who withholds, and when
Withholding applies to sales or exchanges of West Virginia real property and associated tangible personal property by a nonresident individual or entity when the sale changes ownership. No withholding is required for an entity that holds a current West Virginia business registration certificate.
The withholding is done by the "individual in charge of reporting the real estate transaction": the closing attorney or title company, the mortgage lender, the seller's broker or the buyer's broker. The buyer has that role only if none of those is involved. The amount must be withheld before the deed is presented for recording.
The statute lists six exceptions. One of them is a certificate from the Tax Division stating that no tax is due, that a reduced amount is due, or that the seller has provided adequate security. There is no separate 1031 exception, which is why the NRAE application is the route for an exchange.
The Tax Division's April 2026 guidance and its current forms use 4.58% of estimated capital gain. Some older sources, including the text of the statute, show 6.5%, so confirm the rate with your closing agent.
Forms after closing
| Form | Purpose | Timing |
|---|---|---|
| NRAE | Application for certificate of full or partial exemption, including the 1031 line | Received by the Tax Division at least 21 days before closing |
| NRSR | Return of income tax withholding, with check or money order | Within 30 days of the date the tax was withheld |
| NRER | Application for early refund of withholding | Not before 30 days after the effective date of transfer, and not after December 15 of the year of sale; the appropriate WV income tax return must be filed to obtain the refund |
If a certificate stating a partial amount is issued, the withholding agent withholds that amount before recording. Any amount withheld is credited to the seller against West Virginia tax on the gain, with any excess refundable.
Transfer taxes still apply
West Virginia's excise tax on transferring title to real estate is $1.10 for each $500 of value or fraction, with a $20 affordable housing fee on transfers for consideration, plus a county excise tax that counties may set as high as $1.65 per $500. The statute makes the grantor pay unless the grantee accepts the document without the tax having been paid. The list of documents excluded from the tax in section 11-22-1 covers items such as wills, deeds of partition, leases, and transfers between certain family members without consideration. It does not mention exchanges, so your sale deed and your purchase deed carry the tax as usual.
State income tax
For a West Virginia resident, adjusted gross income starts from federal adjusted gross income with specified modifications, so deferral under §1031 carries through unless a modification applies. We did not verify a clawback or annual reporting rule for replacement property outside West Virginia; ask your tax advisor.
Timeline for a nonresident's West Virginia sale
- About 30 days before closing: sign the exchange agreement; the intermediary prepares its letter.
- At least 21 days before closing: the Tax Division receives the NRAE and the letter.
- At closing: the certificate goes to the closing agent; the contract is assigned and the buyer notified; proceeds go to the intermediary.
- Day 45 and day 180: identification and purchase, as in any exchange. The deadline calculator gives both dates.
Questions West Virginia sellers ask
I live in Ohio and am selling a West Virginia rental. Will West Virginia withhold if I am doing a 1031?
Yes, unless the Tax Division has issued an exemption certificate before closing. Apply on Form NRAE, with the intermediary's letter, so it is received at least 21 days ahead.
What does West Virginia need from the intermediary?
A signed letter naming you, describing the property, confirming the 1031 exchange, and stating whether there is boot and how much.
Are transfer taxes waived for an exchange?
No. The excise tax applies to each deed, and the statute makes the grantor responsible unless the grantee accepts the deed without it having been paid.
Related
Sources
- West Virginia Tax Division, TSD 389 Withholding Requirements for Sales of Real Property by Nonresidents (Rev. April 2026) (checked September 30, 2026)
- West Virginia Tax Division, Form WV NRAE and instructions (Rev. 09/2026) (checked September 30, 2026)
- West Virginia Tax Division, Form WV/NRSR (Rev. 04/26) (checked September 30, 2026)
- W. Va. Code 11-21-71b Withholding tax on West Virginia source income of nonresidents (checked September 30, 2026)
- W. Va. Code 11-22-1 and 11-22-2 (excise tax on transferring real property) (checked September 30, 2026)
- W. Va. Code 11-21-12 (checked September 30, 2026)
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