Updated October 4, 2026. Quick answer: Yes. Virginia starts from federal adjusted gross income, so a capital gain is taxed on its graduated schedule: 2%, 3%, 5% and “5% from $5,001 to $17,000; and 5.75% for income over $17,000”. The instructions print no separate rate for gains.
Selling your home? How the state taxes the profit, from its own tax documents: Does Virginia tax the profit from selling your home?.
The same question for dividends and interest: does Virginia tax dividends and interest.
How Virginia treats capital gains
| Item | What the documents say |
|---|---|
| Treatment | Taxed as ordinary income on the graduated schedule; no separate rate for gains is printed |
| Rates | 2% up to $3,000, 3% to $5,000, 5% to $17,000 and 5.75% above $17,000 |
| Where it is written | Form 760 instructions (2025) and Va. Code 58.1-320 |
A $50,000 long-term gain
A single filer whose Virginia taxable income is already above $17,000 pays 5.75% on the whole gain, computed as $50,000 x 5.75% = $2,875.
What changes in 2026
Va. Code 58.1-320 prints 5.75% on income over $17,000 with no change shown for 2026.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on gains in Topic no. 409, Capital Gains and Losses and Publication 550, Investment Income and Expenses.
Related: whether Virginia taxes pensions, how Virginia taxes retirement income, the capital gains tax by state table, and the federal capital gains tax calculator.
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Answer againSources
- 2025 Form 760 Resident Individual Income Tax Instructions: https://www.tax.virginia.gov/sites/default/files/vatax-pdf/2025-760-instructions.pdf
- Code of Virginia 58.1-320 Imposition of tax: https://law.lis.virginia.gov/vacode/title58.1/chapter3/section58.1-320/
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.