In the state of Florida, documentary stamp tax must be considered in all transfers of interest between Florida corporate entities, and transfers of real estate. Documents recorded with the Clerk of Courts, such as deeds and mortgages, require tax to be paid at time of recording.
Consideration consists of:
- Mortgage or other lien encumbering the property
- Exchange of property
- Money paid or to be paid
- Any monetary consideration which has value
The tax rate for documents that transfer an interest in real property is $.70 per $100 of the total consideration paid, or to be paid, for the transfer. In Miami-Dade County, however, the tax rate is $0.60 per $100 of the total consideration paid, given, or to be paid or given for the property. Miami-Dade County also imposes a documentary stamp surtax of $0.45 per $100 of the consideration on all documents that transfer an interest in Florida real property other than a single-family dwelling.
Examples of documents that include a transfer of interest in real property include:
- Mortgage or other lien encumbering the property
- Exchange of property
- Money paid or to be paid
- Any monetary consideration which has value
- Mortgage or other lien encumbering the property
- Exchange of property
- Money paid or to be paid
- Any monetary consideration which has value
Exemptions:
If a document that transfers an interest in real property between husband and wife and the only consideration is a mortgage or lien, tax will not be due -same holds true if the deed is for homesteaded property. Additionally, if the property is not mortgaged or if the marital home is transferred due to a divorce, documentary stamps would not be due in this instance. If there is no mortgage and no other consideration for the transfer, there is no basis to calculate a tax and tax will only be due on the consideration shown in the face of the deed.
Also, an enhanced life estate deed or lady bird deed is not subject to documentary stamps. Link: https://floridarevenue.com/TaxLaw/Documents/20B4-004.pdf
Tax Penalty:
If you file your return or pay tax late, a penalty of 10% of any unpaid tax for each 30 days or fraction thereof, not to exceed a total penalty of 50% of unpaid tax, is charged. The minimum penalty is $10, even if no tax is due.
The following are examples of documentary stamp tax calculations:
- A wife deeds her homestead Florida real property to herself and her husband. The property is encumbered by a mortgage and there is no other consideration for the property interest transferred. No tax is due. Section 201.02(7)(b), Florida Statutes (F.S.), exempts documents of transfer between spouses of homestead property where the only consideration is a mortgage. Homestead is defined in Section 192.001, F.S.
- James transfers an interest of his unencumbered real property in Monroe County with a fair market value of $400,000 to his new spouse. There is no mortgage on the property at the time of transfer, and there is no other consideration. If the deed reflects nominal consideration, such as “love and affection and $1” or “$10 or other good and valuable consideration,” then $.70 tax is due.
- Angela purchases property located in Escambia County from Lily. Angela gives Lily $30,000 as a down payment and Lily takes back a note and mortgage from Angela in the amount of $150,000. Since there is no other consideration for the transfer, the tax is calculated on $180,000 (the $30,000 paid and the $150,000 to be paid). Tax calculation: 1,800 (number of taxable units representing each $100 or portion thereof of the consideration of $180,000) x $.70 = $1,260.00 tax due.
- XYZ Corporation, which owns Alachua County property with a fair market value of $5,000,000, transfers the property to its subsidiary AAA Corporation. At the time of transfer the property is encumbered by a mortgage in the amount of $3,000,000 and the property secures a line of credit with an outstanding balance of $700,000. Since there is no other consideration for the transfer, the tax is calculated on $3,700,000 (the $3,000,000 mortgage plus the line of credit balance of $700,000).
Know Your Rights Before You Act
Stephen K. Hachey, an experienced document stamp tax attorney, can help you determine your options and advise you on the best course of action based on your unique situation. And with offices spread out across Tampa Bay, he’s available and accessible to begin representing you.
