The Florida Documentary Stamp Tax is a tax on the transfer of real property or taking out a mortgage. Some people call it a tax on buying a house, but whether the buyer or seller pays is negotiable.
What is the Documentary Stamp Tax rate?
The tax depends on the amount of consideration given for the transaction. This will usually be the purchase price. There is a separate rate for notes and mortgages (discussed further down in this post).
The normal tax rate is $0.70 for each $100 of consideration or portion thereof. (Section 201.02(1)(a), Florida Statutes (F.S.)) For example, if there is $110 in consideration, the tax is $1.40.
In Miami-Dade County, the state tax rate is reduced to $0.60 per $100 but there is also a surtax of $0.45 per $100. (Section 201.031, Florida Statutes) The surtax does not apply to the transfer of a single-family residence.
The tax is based on where the document is filed. That would generally be where the home is located. For example, if you buy a home in Orange County, you would file the deed and pay tax in Orange County. It doesn’t matter if both the buyer and seller live or complete the transaction somewhere else.
What is consideration?
Consideration is anything of value given in exchange for something else. Examples include:
- Money paid now or later
- Discharging a promissory note or other financial obligation
- Other real property
- Personal property
- A mortgage, lien, or other encumberance on the property
If consideration isn’t cash, you generally use the fair market value. For example, if you buy a house for $100,000 in cash and another house worth $100,000, the consideration is $200,000.
If the buyer assumes a mortgage or other loan, the amount of that loan is added to consideration. That’s because the seller gets something of value by no longer having to pay that debt. For example, if you buy a house for $100,000 in cash and assume a $300,000 loan, the consideration is $400,000.
Who pays the Documentary Stamp Tax?
All parties listed on the document are liable for the Documentary Stamp Tax. The parties should agree on who pays as part of the transaction.
If one part is exempt from the tax, the other must pay it.