If you are transferring your house, you need to be on the lookout before you get dinged with taxes! Florida’s documentary stamp tax is a special tax added onto the transfer of real property, unless there are exceptions. These taxes must be considered when transferring your house or real property, especially with a change in ownership interest. When drafting the deed, make sure you use special language to provide notice regarding the amount of stamp taxes due.
What is Subject to the Tax?
Before you worry about the amount due and the language required, your first step is to analyze if the transfer is even subject to the tax. However, as the statute is very broad, you will probably need to pay a documentary state tax. Unless an exception applies of course. Per Section 201.02(1)(1), all of the following requirements must apply:
- deeds, instruments, or writings,
- whereby any lands, tenements, or other real property, or any interest therein, shall be granted, assigned, transferred, or otherwise conveyed to, or vested in
- the purchaser or any other person by his or her direction.
A married couple can transfer an interest in mortgaged homestead property, as long as they do so during the first year of marriage. There is certain language that should be placed inside the deed depending if the house is encumbered or not, and whether the spouses are in their first year of marriage. The existence of a mortgage and the amount of time the parties have been married will dictate the stamp taxes due. If there is a dissolution of marriage, that should be referenced in the deed.
Transfer to a Qualified Personal Residence
When the husband and wife each transfer an undivided ½ interest to their Qualified Personal Residence Trust, there are no taxes due since they retain a beneficial interest for a term of years and no consideration changes hands.
Husband and Wife to a Join Trust
A transfer of property owned by the husband and wife to their joint trust in which they are both beneficiaries is not a change of ownership. Thus, no taxes are due.
One Spouse to a Joint Trust
There is no exception in this category. If there is no mortgage, the spouse should consider first transferring to both parties as tenants by the entirety, and then a second conveyance to the trust.
Transfer from Revocable Trust to the Beneficiary of Trust
If there is no change in beneficial interest, then there is not tax due, even if there is a mortgage.
Lady Bird Deeds
For deeds reserving on the grantor the right to divest the remaindermen’s interest, stamps are not due, even if there is a mortgage.
It is important for you to be aware of these taxes and talk to your attorney about whether they apply to your anticipated transfer.
Based out of Tampa, Florida, Lori is mom to a fantastic 5-year-old boy. They love to go on local adventures, travel and play with matchbox cars for seemingly endless hours. Lori enjoys reading classic novels, organic gardening, and studying languages with her son. She considers herself well-versed in Seinfeld and welcomes any trivia!
Disclaimer: The Law Office of Lori Vella’s website contains general information directed to Florida residents. This firm does not intend to give legal advice through its pages and/or blog. If you need legal advice, we encourage you to find an attorney licensed in your state. This language on this website does not create an attorney-client relationship between you and this firm.