Topic 14.4: State Transfer Taxes

Learning Objectives

After successfully completing this topic, you will be able to
• calculate the dollar amount of transfer taxes on deeds, mortgages and notes, and
• allocate taxes and fees to the proper parties and compute individual costs.

Overview

Documentary stamp tax is an excise tax imposed on certain documents executed, delivered, or recorded in Florida. The most common examples are
• documents that transfer an interest in Florida real property, such as deeds; and
• written obligations to pay money, such as promissory notes and mortgages.
Tax is paid to the Clerk of Court when the document is recorded. When a taxable document is not recorded, the tax must be paid directly to the Florida Department of Revenue.

State Documentary Stamp Tax on Deeds

The tax rate imposed on deeds is 70 cents (60 cents in Miami-Dade County) on each $100 or portion thereof of the total consideration. The tax is based on the sale price of the property regardless of the financing. This is typically paid by (debited to) the seller. Click on the following video for step-by-step instructions to make the calculations:

Example of documentary stamp tax on deed
Sales price is $267,800. What is the documentary stamp tax on the deed?
To check your answer, see solution at the bottom

State Documentary Stamp Tax on Notes

Promissory notes and other written obligations to pay money signed or delivered in Florida are subject to documentary stamp tax. This includes new and assumed promissory notes, but not on purchases made subject to the mortgage. Tax is due on the full amount of the obligation. Click on the following video for step-by-step instructions to make the calculations:

Example of documentary stamp tax on note
The promissory note with a mortgage is $225,400. What is the documentary stamp tax on the note?
To check your answer, see solution at the bottom

State Intangible Tax on Mortgages 

Intangible personal property taxes are payable at the rate of $.002 times the amount of the indebtedness secured by a new mortgage on Florida real property. The intangible tax would not be charged on assumed mortgages or property purchased subject to the mortgage. There is no rounding involved. The buyer usually pays for the intangible tax on the mortgage. Click on the following video for step-by-step instructions to make the calculations:

Example of intangible taxes on a mortgage
The new mortgage is $225,400. What is the intangible tax on the mortgage?
To check your answer, see solution at the bottom

Answers to doc stamp questions above

Sales price is $267,800. What is the documentary stamp tax on the deed?
Divide the sales price by 100.
Multiply the result by .70 to get the tax:
$267,800 Ă· 100 = 2,678         2,678 x .70 = $1,874.60.
BUT, if the amount was $267,810, when you divide, you would get a decimal at the end ($267,810 Ă· 100 = 2678.1).  If you get a decimal, add 1 to the 2,678 and get a result of 2,679. Multiply 2,679 x .70 to get $1,875.30.  

The promissory note with a mortgage is $225,400. What is the documentary stamp tax on the note?
Multiply the note amount by .35 to get the tax: 2,254 x .35 = $788.90.
BUT, if the amount was $225,430, when you divide you would get a decimal at the end ($225,430 Ă· 100 = 2254.3). 
Round up to get 2,255. Multiply 2,255 x .35 to get $789.25.

The new mortgage is $225,400. What is the intangible tax on the mortgage?
Multiply the mortgage amount by .002 to get the tax: 225,400 x .002 = $450.80.
If the amount was $225,430, the process is the same: Multiply the mortgage amount by .002 to get the tax: 225,400 x .002 = $450.80.