The Florida intangible tax is a one-time tax on obligations to pay money secured by a mortgage or lien.
The intangible tax on stocks, bonds, mutual funds, and other intangible assets was repealed in 2007.
How much is the Florida intangible tax?
The Florida intangible tax is 2 mills. That’s 0.2%.
For example, the tax on a $100,000 is $100,000 x 0.002 = $200.
The tax is only on the amount of the mortgage. It does not apply to the portion of the purchase price covered by your down payment.
Additionally, if your mortgage is worth more than the value of the property, only the portion of your mortgage equal to the property value is taxable. In other words, if you borrow more than the home is worth, the tax is on the property value instead of the mortgage value.
Who pays the intangible tax?
The lender technically pays the intangible tax directly to the state. The lender will often pass the tax on to the buyer as part of closing costs.
Check with each lender you’re considering for how they handle closing costs and what you will have to pay.
Does the intangible tax apply to home equity loans or lines of credit?
The intangible tax is generally on any loan that’s backed by a mortgage or lien on your home. See Florida Statute 199.133.
Unconditional obligations, such as a loan for something related to your home but without a lien, are generally not subject to the intangible tax.
Again, check with your lender for the charges that may be associated with your loan.
Do property tax exemptions apply to the intangible tax?
The intangible tax is separate from Florida property taxes. The Homestead Exemption and other exemptions are not deducted.
Can you deduct the Florida intangible tax on your federal taxes?
The IRS considers the intangible tax to be a transfer tax. It does not fall under the State and Local Tax deduction.
If your lender charges you for the intangible tax when buying a home, you can add it to the cost basis of your home. See https://www.irs.gov/taxtopics/tc703. When you sell your home, this will allow you to subtract a larger purchase price from the selling price to determine if you will owe capital gains tax.