One of the most important aspects of a property sale or transfer is the deed. This is a document that specifically transfers property from one person to another. The deed includes crucial information about the name of the seller, the name of the person to whom the property is being transferred, and information about the property itself. Property is transferred in a formal process using a deed. It is an important aspect in a real estate sale or transfer.
The Florida Department of Revenue collects taxes when property is transferred or sold in the state. It is important to consider these taxes when gifting property. In Florida, with few exemptions, when property is gifted or transferred without money being exchanged, the Florida Department of Revenue will still collect taxes on the transfer. When buying property, these taxes will be part of the closing costs. The documentary stamp tax is a tax that Florida assesses on deeds, bonds, promissory notes or financial obligations, mortgages, liens, or other documents outlining a debt. The tax rate for these notes depends on the type of transfer taking place. According to the Florida Department of Revenue, the tax rate for the transfer of real property is $0.70 for every $100 paid in the transfer. In Miami-Dade County, the rate is $0.60 for every $100 paid in the transfer if the property is a single-family home or residence. Any other property is subject to a $0.60 rate for every $100 plus a $0.45 surtax. Individuals may be required to pay these taxes, even if money isn’t exchanged in the deed transfer. If this is the case, the fair market value of the property would be assessed and the tax would be levied based on that rate.
What kinds of transfers are subject to this tax? Transfers include deeds, quit claim deeds, easements, assignment of benefits in a trust, exchanges of property, and more. Mortgages are also subject to the documentary stamp tax. According to the Florida Department of Revenue, the tax rate is $0.35 per $100 of indebtedness on the mortgage. If you are buying, selling, or transferring real estate in Florida, it is important to understand your tax obligations and rights.
Some individuals may be subject to stamp tax exemptions. If you have questions about how much in taxes you might owe when transferring a deed, selling property, or taking out your mortgage, consider speaking to Legal Counsel, P.A., a real estate law firm in Orlando, Florida. Our real estate attorney can review these details of your transaction.
Florida Documentary Stamp Tax Newlywed Exemption
In most instances, if property is transferred as a gift or within a family, the documentary stamp tax must be paid. However, if you have been recently married, you may be able to transfer property to your partner within the first year of marriage without having to pay the documentary stamp tax. Let’s say you recently got married and own a home, and you want to place your partner’s name on the deed. Rather than paying the documentary stamp tax, you may qualify for an exemption under Florida law when you go to add your partner’s name to the deed.
So, if you have recently gotten married and want to add your partner’s name to a deed, or want to transfer some of your property to your partner, you may be able to do so in the first year of your marriage without having to pay the Florida documentary stamp tax. It is important to note that the exemption does not include the transfer of property into a trust. If you have questions about how the Florida documentary stamp tax’s newlywed exemption may apply to you, or if you have recently gotten married and have questions about how marriage might impact your deeds and ownership of property, consider reaching out to Legal Counsel, P.A., a real estate law firm in Orlando, Florida today. Have questions? We have answers. Contact Legal Counsel, P.A. today at 407-982-4321.
Buying Property or Transferring Property in Florida?
If you are buying property or transferring property in Florida, you may want to hire a real estate lawyer to assist you with overseeing the legal aspects of the transfer. The transfer of property, even if the property is being transferred as a gift, requires that formal processes be followed. If you are selling or buying real estate, one of the most important aspects of your purchase is the formal recording of the deed. In Florida, this process requires that taxes be paid and documents be in proper order. Legal Counsel, P.A. is a real estate law firm in Orlando, Florida that works with individuals who are buying or selling real estate, and with those who want to give real estate to loved ones or family. Contact our Orlando, Florida real estate lawyer today to learn more. Have questions? We have answers. Contact Legal Counsel, P.A. today at 407-982-4321.