Who pays doc stamps in Florida, and how much are they?

What doc stamps are in Florida

Doc stamps is the everyday name for Florida’s documentary stamp tax, an excise tax on certain documents executed, delivered or recorded in the state. The Department of Revenue names the two most common kinds: documents that transfer an interest in Florida real property, such as deeds, and written obligations to pay money, such as promissory notes and recorded mortgages.

The tax is on the document, not on the sale. That is why a deed with nothing but nominal consideration still owes a minimum, why a deed signed outside Florida for Florida land still owes the tax, and why a deal that produces two deeds, such as a double close, pays it twice. The tax is paid to the county clerk of court or recording official when the document is recorded; when a taxable document is not recorded, it is paid directly to the Department.

Who pays doc stamps in Florida: custom and the contract

In a Florida home sale, the seller customarily pays the doc stamps on the deed. The standard AS IS residential contract used across Florida lists “Documentary stamp taxes and surtax on deed, if any” among the costs to be paid by the seller, and a Florida title company describes the seller as the party that typically pays it.

The buyer’s side of the same contract carries a different stamp tax. Its list of costs to be paid by the buyer includes “Taxes and recording fees on notes and mortgages”, which means the stamps on a new loan, and the intangible tax described below, normally land on the buyer who is borrowing.

Both allocations are defaults, not law. The parties can move either cost in the contract, and investors often do: a cash offer that asks the seller to pay nothing at closing may put the deed stamps on the buyer. Read the closing cost paragraph of each contract you sign, because it is the only place the answer for your deal is written down.

Who is liable: every party to the deed

Custom decides who writes the check. It does not decide who owes the tax. The Department of Revenue states that all parties to the document are liable for the tax regardless of which party agrees to pay it, and that if one party is exempt, the tax must be paid by a non-exempt party.

In practice the closing agent collects the tax at closing from whoever the settlement statement charges and pays it when the deed records, so liability rarely becomes a question. It matters when a deed is signed outside a closing, when a seller’s proceeds will not cover the tax, or when a deed is never recorded at all. In each of those cases the buyer is as answerable to the state as the seller.

The doc stamp rates on a Florida deed

Two rate schedules cover the whole state, and the county decides which one applies. The Department applies the 60 cent rate, and the surtax, only in Miami-Dade.

• Every county except Miami-Dade: 70 cents on each $100 of consideration, or portion of $100, under section 201.02 of the Florida Statutes.
• Miami-Dade, single-family residence: 60 cents on each $100, with no surtax.
• Miami-Dade, anything else: 60 cents on each $100 plus a discretionary surtax of 45 cents on each $100, for $1.05 in all. That covers vacant land, multifamily buildings and commercial property.
• What counts as single-family: section 201.031 says the residence may be a condominium unit, a qualifying cooperative unit or a detached dwelling. The Department’s rule adds that a document conveying more than one single-family residence owes the surtax.

How to calculate doc stamps on a Florida deed

The arithmetic has one trap: the tax is charged on each $100 or portion of $100, so any part of $100 counts as a whole one. Divide the consideration by 100, round up to the next whole number, and multiply by the rate. The Department’s own example is a property exchanged at a fair market value of $40,675, which is 407 taxable units, and 407 × $0.70 = $284.90.

Take a sale at $347,250 outside Miami-Dade. Divided by 100 that is 3,472.5, which rounds up to 3,473 units, and 3,473 × $0.70 = $2,431.10. The same sale of a single-family house in Miami-Dade is 3,473 × $0.60 = $2,083.80. The same price on a duplex in Miami-Dade adds the surtax: $2,083.80 plus 3,473 × $0.45 = $1,562.85, for $3,646.65.

The table below runs round prices through the same steps. A round price has no partial $100, so the figures are exact. For any other price, round the units up before multiplying.

What counts as the price: consideration

The tax is figured on consideration, which is wider than the cash at closing. Section 201.02 says consideration includes the money paid or agreed to be paid, the discharge of an obligation, and the amount of any mortgage, purchase money mortgage lien or other encumbrance, whether or not the underlying debt is assumed. When property other than money is exchanged, the consideration is presumed to equal the fair market value of the real property.

Three examples show how far that reaches.

• Seller financing: in the Department’s example, a buyer pays $30,000 down and the seller takes back a $150,000 note and mortgage. The tax is on $180,000, which is $1,260.
• Deed in lieu of foreclosure: the debt the lender forgives is the consideration. The Department’s Miami-Dade example taxes a $225,132.75 balance at 60 cents, $1,351.20, even if the house is worth less.
• Short sale: the statute carves out the forgiven part. In a qualifying short sale, unpaid debt that the mortgage holder forgives or releases is not taxable consideration, so the tax follows the price actually paid.

Doc stamps on a mortgage, and the intangible tax

A buyer who borrows pays a second set of Florida taxes, on the loan rather than the deed. Under section 201.08, notes and mortgages owe documentary stamp tax of 35 cents per $100, or portion of $100, of the debt. When there is both a note and a mortgage, the tax is paid on the mortgage when it is recorded. The Department caps the tax on a note or other written obligation at $2,450, and puts no cap on the tax due on a recorded mortgage.

On top of that, section 199.133 imposes a one-time nonrecurring intangible tax of 2 mills, or $2 per $1,000, on notes and other obligations secured by a mortgage on Florida real property. A $200,000 mortgage therefore carries $700 in doc stamps and $400 in intangible tax, both normally the borrowing buyer’s under the standard contract.

This matters to an investor in two places: on a financed purchase, and on any short-term funding documented with a recorded Florida mortgage. Ask the lender how its loan is documented, because an unrecorded note and a recorded mortgage are taxed differently.

Quitclaim deeds, gifts and deeds into your own LLC

A quitclaim deed is taxed like any other deed. The Department lists warranty, special warranty, quitclaim, trustee’s and life estate deeds among the documents subject to tax, so the form of deed changes nothing. What changes the tax is the consideration.

Where no money changes hands and nothing is owed on the property, the tax is the minimum. The Department’s examples of unencumbered property deeded to a spouse, to children, and from a subsidiary to its parent company each say that if the deed shows nominal consideration, such as “$10 or other good and valuable consideration”, $0.70 is due.

A mortgage changes that. In another of the Department’s examples, a company deeds property to its subsidiary while it carries a $3 million mortgage and a $700,000 credit line, and the tax is on $3.7 million: $25,900. Moving a financed rental into an LLC, even one you own outright, is generally taxed on the loan balance.

Florida also taxes the shortcut of selling the LLC instead of the deed. Under the conduit entity provision in section 201.02, when real property is conveyed without full consideration to an entity in which the grantor holds an interest, and that interest is later transferred for consideration within 3 years, each such transfer is taxed at 70 cents per $100 of what is paid for the interest.

Deeds that owe no doc stamps

A short list of transfers is exempt, and the Department publishes the common ones. Each has conditions, so read them as a reason to ask the closing agent, not as a ruling on your deed.

• Homestead between spouses, when the only consideration is the mortgage or other lien on the homestead.
• The marital home between spouses or former spouses under a dissolution of marriage, transferred at or after the divorce; tax paid on such a deed within a year before the divorce may be refunded.
• A personal representative’s deed given under a duly probated will.
• A transfer made under a threat of eminent domain or condemnation.
• A deed from an agent to the principal, when the agent bought the property for the principal with the principal’s funds.
• Estate planning, by contrast, has no specific exemption, according to the Department.

A double close pays doc stamps on both deeds

A double close is two sales, and each sale has its own deed. The A to B deed, from the original seller to you, is taxed on your purchase price. The B to C deed, from you to the end buyer, is taxed on the end buyer’s full price, not on your spread. A Florida real estate attorney who writes about simultaneous closings makes the same point: the tax on the second deed is on the entire consideration paid by the purchaser.

Take a house bought at $200,000 and resold at $240,000 the same day, outside Miami-Dade. The first deed owes $1,400 and the second owes $1,680, so $3,080 of doc stamps for a property you held for hours. Under the standard contract’s defaults the original seller pays the first, and you pay the second, because on the B to C leg the seller is you. The cost of a double close has to carry that $1,680 alongside the funding fee and a second set of closing charges.

The structure still earns its cost when the contract cannot be assigned, or when the end buyer should not see your spread. If you double close for either reason, Entrusted Capital provides same day transactional funding for double close deals, funding the front-side close for up to 100% of the purchase price, which keeps your fee private from the end buyer.

An assignment pays once, with one open question

An assignment of contract produces one deed, from the original seller straight to the end buyer, so the deed stamps are paid once. That is one of the main reasons an assignment costs less than a double close, and it is fixed by statute rather than by anyone’s pricing.

The open question is the assignment fee. At least one Florida attorney certified by The Florida Bar in real estate law reads section 201.02 as reaching the assignment itself: because the statute taxes writings by which any interest in real property is assigned, the fee paid for the assignment can owe documentary stamp tax, payable to the Department on its return for unrecorded documents because nothing is recorded. The Department’s rules do not address a wholesale assignment fee by name. Ask your closing agent and a Florida tax adviser or real estate attorney how yours will be treated before you set the fee.

When and where doc stamps are paid

For a recorded deed, the tax is generally paid to the county at the time of recording, and your closing agent handles it as part of the closing. Deeds are taxable whether recorded or not. If a deed is not recorded by the 20th day of the month following its delivery, the tax must be sent to the Department as an unrecorded document.

Unrecorded documents have their own returns. A taxpayer who is not registered uses the Department’s return for nonregistered taxpayers’ unrecorded documents, due by the 20th of the month after the document was executed, and anyone averaging five or more taxable transactions a month must register with the Department. An investor who signs taxable documents outside a closing, such as unrecorded notes, should know which side of that line they are on.

A short checklist before you sign

Doc stamps are easy to forecast and expensive to discover late. Run these before the contract is signed, while the price and the cost allocation are still yours to set.

• Find the county, and whether the deed transfers only a single-family residence if it is in Miami-Dade.
• Work out the tax on the full consideration, including any mortgage the buyer takes subject to, rounding each partial $100 up.
• Read who pays in the contract’s closing cost paragraph, and remember every party stays liable.
• If you are borrowing, add 35 cents per $100 on the mortgage and the 2 mill intangible tax.
• If you are wholesaling, price the stamps on both deeds for a double close, and ask how an assignment fee will be treated for an assignment.