The Quick Read: A VA cash-out replaces your old loan with a new note and a new recorded lien. In states that tax that recording, the tax is usually figured on the new loan amount, not just the cash you take out. VA rules allow the veteran to bear that tax. VA does not waive or reduce it. Because the tax comes out of your equity, it shrinks the cash you walk away with.
Key Takeaways
- A state recording tax is different from a flat recording fee. The tax grows with the loan. The fee does not.
- VA lets the veteran pay recording taxes as an itemized charge. No VA rule exempts you from a state’s tax.
- Financed taxes and the funding fee both sit under the 100% of appraised value ceiling. In a high-tax state, that can mean less cash out.
- Each state taxes differently. Some tax the full new balance. Some give credit for the old loan. Your title or closing agent can tell you which applies.
- Compare lenders on origination and third-party charges. Government taxes tend to look the same from lender to lender.
VA cash-out estimate
Seeded with an example value, a typical balance, and a round cash request at the first-use fee; change any field.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a VA cash-out refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $193,000 current balance, the full-value VA cap with the first-use funding fee financed, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a VA cash-out refinance quote; a VA loan is priced by the lender at lock. The total loan, funding fee included, is capped at the program leverage on the reasonable value; the fee follows the tier chosen. The cash available is what the cap allows less the balances paid off and the fee, before closing costs, which are not included. The HELOC line is the line program’s combined loan-to-value ceiling applied to the same value and balance. Taxes and insurance are editable estimates. The debt-to-income figure is a guideline; residual income decides a VA file. Licensed in sixteen states for consumer mortgages.
Why Does a VA Cash-Out Trigger a Recording Tax at All?
A cash-out is not a modification of your old loan. It pays off the old mortgage and creates a new one. The new mortgage must be recorded in the county land records to protect the lien.
Many states tax that act of recording. They treat the new note as a fresh debt secured by your home. It does not matter that you owned the house before. It does not matter that part of the new balance simply pays off the old one.
Here is the catch. A flat recording fee pays the county clerk for filing paper. It does not change with your loan size. A recording tax is a different animal. It is a percentage-style charge based on the amount the mortgage secures. On the Loan Estimate and Closing Disclosure, a charge based on loan size is disclosed as a tax, not a recording fee, even if the state gives it another name.
The cash-out amount drives the tax base. A bigger loan, including financed fees, usually means a bigger tax.
Key Terms Defined
Recording fee: A flat charge for filing your loan documents with the county. It does not depend on the loan amount.
Recordation or mortgage recording tax: A state or local tax on recording a mortgage, usually calculated from the amount of debt the mortgage secures.
Documentary stamp tax: Florida’s name for a tax on the written debt, figured per $100 of the amount secured.
Intangible tax: A separate tax some states put on the mortgage debt itself. Florida’s version is called the nonrecurring intangible tax.
Funding fee: VA’s one-time charge on most VA loans. It can be financed, and it is waived for exempt veterans.
Net cash: What you actually receive. It equals the new loan minus the payoff, any other liens, the funding fee and closing costs.
Reasonable value: The appraised value VA assigns to your home. It sets the ceiling on the new loan.
What Does VA Say About Who Pays?
VA’s rule on allowable charges lists “recording fees and recording taxes or other charges incident to recordation” among the reasonable and customary costs a veteran may pay. That language comes from 38 CFR 36.4313. The rule separates these itemized pass-through charges from the optional flat origination charge. That flat charge, up to 1% of the loan, stands in for origination costs not expressly listed.
So a government recording tax is not a junk fee. It is not tucked inside the flat origination charge. It is an itemized charge, passed through at the amount the state sets.
VA wrote its list as an express enumeration. A veteran cannot be made to pay a charge the schedule does not allow, as the 2017 Federal Register rulemaking explains. Recording taxes are on the allowed side of that line.
Two things follow. First, VA decides who may bear the tax. The state decides whether the tax exists and how big it is. Second, no VA source exempts VA loans from state recording or mortgage taxes. The claim “VA loans are exempt” does not hold up.
How Do the High-Cost States Actually Charge It?
The mechanisms differ by state. The table shows three common examples of how the base works. They illustrate the mechanics only; they are not a list of where Lendmire arranges loans. These are state tax rules, not loan pricing, and they change, so confirm the current rate before you plan around it.
| State | Name of the charge | What it is based on |
|---|---|---|
| New York | Mortgage recording tax | Amount secured, in layers per $100 |
| Florida | Doc stamps plus intangible tax | Amount secured |
| Maryland | Recordation tax | Debt secured, set by jurisdiction |
New York: stacked layers
New York taxes the privilege of recording a mortgage. Per the state tax department’s mortgage recording tax page, the tax is payable to the county recording office where the property sits. It stacks several components: a basic tax of 50 cents per $100 secured, a special additional tax of 25 cents per $100, and an additional tax of 25 cents per $100 (30 cents inside the commuter transportation district). Cities and counties add their own layer of 25 to 50 cents per $100 where they apply it.
For a one- or two-family home, the first $10,000 is excluded from the additional tax component only. The state’s rate list shows what applies in your jurisdiction. New York City adds its own city-level piece, so a New York City borrower should expect a noticeably heavier combined total. Ask your title agent for the exact figure.
Florida: two taxes, one base
Florida charges documentary stamp tax on a mortgage at 35 cents per $100 of the debt secured, according to the Florida Department of Revenue. It also charges a nonrecurring intangible tax of 2 mills on the amount secured by Florida real property.
By statute, the lender is the taxpayer on the intangible tax. The lender may pass that cost to the borrower. Many lenders do. So “the lender pays it” is a myth you should not plan around.
The same agency page says the intangible tax is capped at the property’s fair market value. It may also be prorated if collateral outside Florida secures the same debt.
Maryland: set by the county, computed in layers
Maryland sets recordation tax jurisdiction by jurisdiction, expressed per $500 of debt secured. For a refinance, some counties compute the tax in two pieces: the part of the new loan that covers the old balance, and the new-money part. That is why two Maryland borrowers with the same loan can see different totals. Ask the closing agent for the county worksheet.
Not every state charges a loan-based recording tax. Many do not. A veteran in a state with only a flat recording fee will see a much smaller line.
Is the Tax on the Whole Loan or Just the Cash I Take Out?
In most taxing states, the starting point is the full amount the new mortgage secures. That includes the part that pays off your old loan. A veteran borrowing the cash-out and a veteran borrowing the same balance for any other reason both start from the same base.
This is where the state rules matter more than the loan program. Some states give a reduced schedule or a credit when the new loan replaces an existing recorded mortgage. Some tax payoff and new money in separate layers. Some do neither. The state and county, the amount secured, whether new money or a prior recorded mortgage is involved, and whether a residential exclusion applies together decide the result.
New York has an assignment-of-existing-mortgage workaround that credits tax already paid on the prior loan. Whether it fits a VA cash-out depends on facts about your existing mortgage. Ask your lender or title agent whether it is available for your loan.
How Does the Tax Change Your Net Cash?
Think of the VA cash-out as a bucket. The ceiling is 100% of VA’s appraised value, and the funding fee has to fit inside it. The VA Lenders Handbook says a cash-out loan, including the funding fee, may not exceed that reasonable-value figure. Some websites say you can borrow 100% plus the fee. That is wrong for a cash-out.
The funding fee on a cash-out is 2.15% for first use and 3.3% for later use, and it is waived for exempt veterans. It can be financed. Recording taxes and other allowable closing costs can also come out of the proceeds. But everything stays under the ceiling.
Run a sample in percentages. Say your payoff is about 70% of the appraised value. That leaves roughly 30% of value as room under the ceiling. Four things share that room: your cash, the funding fee, the recording tax and other closing costs. Each one you finance makes the loan bigger. A bigger loan makes the funding fee bigger. It also makes the tax bigger. That loop is why the cash you actually get is smaller than the headroom looks.
In a state with no loan-based tax, more of that room becomes cash. In a high-tax state, a thinner equity cushion may force a smaller cash-out. The appraisal sets the ceiling, so the tax cannot be negotiated away. Government fees are set by law and are not negotiable.
Two other cautions. Financing the tax raises the balance, so the monthly payment rises with it. And some lenders cap cash-outs below VA’s ceiling. That is a lender overlay, not a VA rule. It varies by lender, so ask.
Cash-Out Versus a VA-to-VA Refinance: Does It Change the Tax?
It can change the math around the tax, though not the tax itself. Across the wholesale programs where Lendmire places VA cash-outs, the program carries the same seasoning as other VA refinances: the later of 210 days from the first payment and the 6th payment. It also requires a net tangible benefit. The VA cash-out refinance program can refinance any loan type into VA, so the loan you are paying off need not be a VA loan.
When the loan you are paying off is itself a VA loan, VA applies extra tests that a non-VA payoff does not. Recording taxes financed into the new loan can count as costs you have to earn back. The VA Lenders Handbook has the details. Ask your loan officer to walk you through it before you commit.
The big decision is whether the benefit beats the cost. A large recording tax stretches the time it takes for any improvement to pay off. It does not make the refinance wrong. It makes the math worth running.
Where Does It Show Up on Your Paperwork?
Look at the Taxes and Other Government Fees section of the Loan Estimate and the Closing Disclosure. Recording fees and other taxes come first there. Transfer taxes come next.
Your closing or title agent collects the tax at closing. The agent delivers it to the county along with the recorded mortgage. Recording is a third-party step, so you pay the amount the state or county sets.
That has a shopping consequence. Government fees are standardized, so they should look similar from lender to lender. The differences you will find are in origination and third-party lines, so compare those. Do not hunt for a lender who “avoids” a tax the state requires.
VA also keeps a state-by-state list of fee deviations. VA Circular 26-24-19 says it exists, and where the list shows a dollar maximum, the lender may not charge more than that. Your lender can tell you whether your state has an entry.
What Do Experienced VA Brokers See in These Files?
The pattern repeats. A veteran sees a headline number for available equity and assumes most of it becomes cash. Then the tax, the funding fee and the closing costs land on the same page. In high-cost closing states, the gap between “available equity” and “net cash” is wider than expected.
The files that go smoothly start with a net-cash worksheet before the appraisal. They ask the title agent for the recording tax early. They ask whether any credit for the old mortgage applies. They size the cash-out to the need, not to the ceiling. If the goal is a smaller amount of cash, a smaller loan means a smaller tax.
Residual income remains the controlling test in underwriting, so a larger balance has to still leave enough monthly room. Eligibility starts with your certificate of eligibility from VA. The wholesale programs Lendmire works with start at a 580 decision score, subject to lender guidelines and full file review.
Myths Versus Facts
Myth: VA loans are exempt from state recording taxes. Fact: VA allows the veteran to bear them, and the state sets them.
Myth: The 1% flat fee covers everything. Fact: That flat charge stands in for unlisted origination costs. Itemized charges, including recording taxes, are separate under VA Circular 26-17-11.
Myth: A funding-fee waiver covers the tax. Fact: The waiver applies to the funding fee only. The recording tax is a state charge.
Myth: I only pay tax on the cash I take out. Fact: Often the base is the whole new loan. The state’s refinance rules decide.
Myth: A recording fee and a recording tax are the same thing. Fact: One is flat. The other follows the loan amount.
Myth: A cash-out can always borrow 100% plus fees. Fact: The funding fee sits inside the 100% ceiling.
How Do You Confirm Your State’s Current Rule?
Start with the title or settlement agent handling your closing. They calculate these taxes daily. Then check the county recorder or state tax agency. Rates and credits change, and older pages go stale.
Ask four questions:
1. Does my state or county tax the recording of a new mortgage?
2. Is it based on the full new loan, or split between payoff and new money?
3. Does any residential exclusion or credit for the old mortgage apply?
4. Is the amount on my Loan Estimate the current figure?
Next Steps
Weigh the tax against the benefit before you decide. If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches. Every program figure is subject to lender guidelines and full file review, and nothing here is a commitment to lend.
Frequently Asked Questions
Can the recording tax be rolled into a VA cash-out loan?
Usually, yes. Allowable charges, including recording taxes, can be paid from loan proceeds. The total loan, with the funding fee, still has to stay under 100% of the appraised value. Financing the tax raises the balance and the payment. Some lenders set a lower cash-out cap than VA does.
Does the funding fee waiver remove the recording tax?
No. The waiver covers the funding fee for exempt veterans, such as those receiving compensation for a service-connected disability. The recording tax is a separate government charge set by state or county law.
Is the tax charged on the whole loan or only the new money?
It depends on the state. Many states start from the full amount the new mortgage secures. Some give credit for tax paid on the old mortgage. Some compute in layers for payoff and new money. Your title agent can confirm which rule applies to your county.
Can I negotiate the recording tax down?
No. Government taxes are set by law. What you can compare across lenders is origination and third-party charges. You can also ask about any legal credit or exclusion the state offers.
Which states charge a loan-based recording tax?
Several do, and New York, Florida and Maryland are common examples. Many states charge only a flat recording fee. Because rules change, ask your closing agent for the current treatment in your county.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and home buyers in 16 states with FHA, VA, conventional and jumbo purchase and refinance loans arranged through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and the agency guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. eCFR, 38 CFR 36.4313: Charges and fees allowable to the veteran
2. Federal Register: Loan Guaranty, Revisions to Allowable Charges and Fees
3. State tax department: mortgage recording tax page (example of a loan-based tax)
4. Florida Department of Revenue: Nonrecurring Intangible Tax
5. VA Lenders Handbook, Chapter 3: The VA Loan and Guaranty
This article is part of Lendmire’s VA Loans series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Does a Condo Questionnaire Change a VA Cash-Out in a High-Cost State? · Can a Veteran With a VA Loan Finance All VA Cash-Out Closing Costs? · How Much a VA Cash-Out Releases for High-DTI Debt Consolidation
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.