Florida Documentary Stamp Tax Guide
In Florida, there is a real estate transfer tax, referred to as the Florida documentary stamp tax. In all areas except Miami Dade County, the tax rate is $.70 for every $100 paid for the property.
In Miami Dade, the cost is a bit less, with a tax rate of $.060 per $100.
So for a quick example, outside of Miami Dade County, the purchase of a $300,000 Florida home would result in a $3,000 documentary stamp tax fee.
The Basics of the Florida Documentary Stamp Tax
The documentary stamp tax is imposed as outlined in Chapter 201, Florida Statutes.
Documents subject to the tax include:
Bonds
Deeds
Mortgages & liens
Notes and other written obligations
For our purposes, the documentary stamp taxes are specific to both deeds contracts, and mortgages.
Written obligations to pay or other written obligations typically refer to unsecured loans, with a maximum tax of $2,450. An example of written obligations to pay could be demand or term notes, retail installment, sale contracts, etc.
When it comes to real estate and the Florida Department of Revenue, the most common documentary stamp tax is imposed when;
Purchasing a single-family residence
Transferring a mortgage
Florida Stamp Tax and Deed Types
There are several types of property deeds in Florida that the documentary stamp tax applies to.
Documentary stamp taxes account for the cost of changing the deed from the current owner to the new owner, along with the filing of all the involved paperwork to document the change legally.
The new deed is a legal document, proving who the new owner is and the transfer of ownership of the real property.
Examples of property deeds that are subject to the transfer tax of property include:
Contracts or agreements for deed (Normal home sale)
Mineral Rights Easements Contracts
Deeds in lieu of foreclosure
Easements
Quit claim deeds
Warranty deeds
Payment and Presentation at Home Closing
The cost of the documentary stamp tax is due at the closing of the home, to transfer the ownership from the current owner to the new owner.
Florida law requires the documentary stamp tax to be shown to the county clerk at the time the deed is presented.
The county clerk will file this information and it becomes public record.
How Much Is The Real Estate Transfer Tax in Florida?
The cost to transfer real estate in Florida depends on which county the property is located.
The rate is the same for all counties in Florida except Miami Dade. Miami’s tax rate is 0.06% of the purchase price.
All other counties in the state of Florida charge a tax rate of 0.07%, based on the home purchase price.
This information ensures calculating the amount of documentary stamp tax due for the transaction is easy to know before you agree to the purchase.
Mortgage Transfers and the Documentary Stamp Tax
All Florida mortgage transfers also have to pay the documentary stamp tax.
The price can vary based on location, but it is typically. $.35 per $100 of the remaining mortgage due on the home. This is different from the previous scenario outlined, where the cost is based on the purchase price of the property.
If the mortgage on a single-family residence is almost paid off, the documentary stamp taxes will be minimal.
However, homes where there is a high balance with the lender, there will be a higher amount due. Typically, the cost is collected during the closing of the home.
In most scenarios, the buyer of the home pays the cost. It is wise to know what the amount will be before you agree to the contract so you can budget for the documentary stamp tax.
There are times when the seller will offer to pay this tax in Florida. They often do so as an incentive to sell the home in less time. They may be in a crunch to get out from under that mortgage.
Who is Responsible to Pay the Documentary Stamp Tax?
In most real estate transactions, the buyer is responsible to pay the documentary stamp tax. It is part of the closing costs when the final documents are completed to transfer ownership.
The documents should say in writing who is responsible to pay them so there isn’t any confusion.
If the seller is going to pay them, that should be documented so the closing costs incurred by the buyer won’t include them.
In some instances, the real estate agent will get a check for the stamp tax from the seller. This is obtained before the deed is recorded with the county clerk.
In other scenarios, the buyer is going to take care of it and they pay the tax directly to the county clerk’s office. It all comes down to the negotiations that are in place among the parties involved.
Paying for Florida’s Documentary Stamp Tax
The usual path of paying for the documentary stamp tax in Florida is through the county clerk’s office when the deed is recorded.
If the document will be recorded after the 20th of the month, the tax has to be paid directly to the Florida Department of Revenue. This ensures the funds are properly allocated to the state income ledger.
If payment is made late, the responsible party will an additional 10% of the tax amount owed per month, up to 50%.
There will also be interest that accumulates annually they are responsible to pay.
Since the transfer taxes in Florida are almost always included in the closing costs though, this is a rare occurrence.
Exceptions to the Stamp Tax in Florida
There are a few exceptions that may apply to a real estate transaction in Florida and the documentary stamp tax. The following entities are exempt from the tax:
County Properties
State Agencies
United States Government Agencies
Florida Municipalities
Other Exemptions
Another exemption is if there is a change to your deed but it isn’t being transferred to a new owner. For example, if you get married and add your spouse to the deed, there is no tax involved.
In rare instances, inheritance transfers can be exempt but typically they have to pay the Florida transfer tax.
Florida government agencies with real property are exempt from estate tax.
Per Florida law, parties including United States government agencies would contribute no portion thereof. The other party member would be responsible for the tax owed.
Summary
The Florida documentary stamp tax and intangible tax requirements are easy to understand and the amounts are simple to calculate.
The cost is the same throughout the state, with the exception being Miami Dade county rate being a bit lower.
The Florida statutes are fairly straightforward, outlining transfer taxes.
If you have any questions, please do feel free to reach out. We’re here to help with any questions relating to your next real estate purchase.
