What is the Florida Documentary Stamp Tax?
The Florida documentary stamp tax is an excise tax on certain documents, including real estate deeds, easement transfers, lease assignments, certificates of title, and any other written transfer of a Florida real estate interest.
An “excise tax” can be understood as a tax that only applies to certain transactions. For example, a tax on cigarettes is an excise tax because that tax only applies to transactions involving cigarettes. Similarly, the Florida documentary stamp tax only applies to certain documents.
What documents are subject to the Florida documentary stamp tax?
First, the tax applies to deeds and other written documents that transfer Florida real property or any interest in Florida real property. This includes real estate deeds, easement transfers, lease assignments, certificates of title, and any other written transfer a Florida real estate interest. However, the tax only applies to these documents when there is monetary consideration or other consideration with pecuniary value. In other words, a gift of a Florida real estate interest—a transfer of an interest not made in exchange for something else of monetary value—is not subject to the documentary stamp tax.
Second, the tax applies to promissory notes and other written obligations to pay any money which was made, executed, delivered, sold, transferred, or assigned in Florida. The tax also applies to any renewals of the obligations listed in the preceding sentence. Additionally, the tax applies to mortgages, trust deeds, security agreements, and other evidences of indebtedness filed or recorded in Florida, along with any renewal of those documents.
What is the Florida documentary stamp tax rate for transfers of real property?
Except for transactions in Miami-Dade County, the tax rate for transfers of real property is .007% of the consideration, or 70 cents per $100. The tax rate in Miami-Dade County is .006% of the consideration, or 60 cents per $100. However, Miami-Dade County has an additional surtax of .0045%, or 45 cents per $100, on all transactions no transferring only a single-family dwelling.
The word “consideration” means the value exchanged. Thus, if you sold a parcel of land in Alachua County for $10,000, the consideration would be $10,000. And the documentary stamp tax on that transaction would be $70. Consideration also includes your mortgage or other liens on the property. This means documentary stamp taxes are still charged when property with a mortgage is given away. For example, if you gave away property with a $100,000 mortgage attached, you would pay $700 in documentary stamp taxes.
What is the Florida documentary stamp tax rate for promissory notes, mortgages, or other written loan obligations?
The tax rate for written loan obligations, including promissory notes and mortgages, is .0035% of the loan amount, or 35 cents per $100. Additionally, Florida has an intangible tax on notes, bonds and other payment obligations secured by a mortgage, deed of trust, or other lien on real property. The rate of the intangible tax is .002% of the loan amount.
Do I have to pay documentary stamp taxes if I am deeding my property for estate planning purposes?
If you deed your property away for estate planning purposes, the transaction would typically have no consideration other than the mortgage. Thus, you would only pay documentary stamp taxes if there was a mortgage or other lien on the property. This means if you own the property free and clear, you can deed it away for estate planning purposes while only paying the minimum doc stamp fee (70 cents).
But what do you do if you have a mortgage on the property? Depending on your situation, your choices are:
Pay the documentary stamp taxes;
Not deed the property; or
Use a lady bird deed.
Lady bird deeds are exempt from documentary stamp taxes because the transfer does not take place until after death. Thus, lady bird deeds can be useful when transferring property with a mortgage, including transfers into trust. However, lady bird deeds have disadvantages as well. Often using a lady bird deed is a good idea, but you should with an estate planning attorney before deciding whether a lady bird deed is right for you.