Florida Documentary Stamp Tax Exemptions Divorce
The stamp tax on documents is usually paid to the clerk or district clerk when the deed is registered. However, if the document is registered after the 20th day of the month following the date of delivery of the document, it must be paid directly to the florida department of Revenue. Divorce deeds – No tax is payable on an act between spouses or former spouses following a dissolution of the marriage if the property is transferred after the divorce and the property was their matrimonial domicile or an interest in it at the time of the divorce. Taxes previously paid on a deed will be refunded if the deed was issued one year before the dissolution of the marriage. If the property is not the matrimonial home, the tax is due on the basis of the consideration that would include all mortgages on the property. The Florida Land Title Association (FLTA) is pleased to announce that the Florida Legislature has addressed an injustice regarding the imposition of document stamps on intramarital transfers. Under current law, Florida`s Act 201.02 imposes document stamps on most spousal transfers if they are based on a mortgage. For example, if a husband owned the property before the marriage, then added his wife, and the mortgage balance was $300,000.00, the Treasury Department would collect stamps on half of the mortgage balance ($150,000). According to subsection 201.02(7) of the F.S. Regulation, there is an exemption for the transfer of the matrimonial home if the parties are involved in a dissolution of the marriage.
Persons who transfer real estate by deed must pay a transfer fee. This fee is charged by admissions offices in most counties. In Florida, this fee is called the Florida Documentary Stamp Tax. Over time, smart taxpayers have developed a plan to avoid the document stamping tax. Instead of selling real estate to a buyer, the owner would transfer it to an LLC and sell the LLC`s shares to the buyer. Assuming there was no mortgage on the property, there would be no tax on the transfer of ownership by the owner to the LLC, as this is really just a change of ownership. And there would be no point in transferring the LLC to the buyer because there is no deed of ownership. So no stamp tax on documents, right? And even better, local tax appraisers don`t know the property has been sold, so they don`t even revalue the property for tax purposes. For many years, the FLTA has been working with lawmakers to change this injustice, where it costs more to add a spouse during marriage than to remove a spouse during divorce. As part of the tax package in HB 7087, F.S.
201.02 (7) is amended to provide for a new exemption for document stamps for the intramarital transfer of family property. This provision only applies if the transfer is made within one year of the marriage, and only at the marital home, but if the law is implemented on July 1, 2018, real estate attorneys and estate planners will be able to support thousands of families in Florida without incurring onerous costs. The exemption from stamp duty in the event of divorce is particularly detailed and sets out several requirements that the parties must meet in order to benefit from the pardon. To qualify, the deed, transfer or transfer must be: John buys vacant land in Miami-Dade County for $500,000. In addition to the stamp tax of $60 per 100 documents, Miami-Dade County also charges an additional discretionary fee of $45 per 100. Since there is no other consideration for the transfer, the tax is calculated at $500,000. Then, in 2009, Florida law was amended to trigger the stamp tax on documents if the stake in the owner entity is transferred within three years of filing with that entity. In other words, if someone transfers ownership to an LLC and then sells the stake in the LLC within three years, the transfer of LLC`s stake is subject to stamp tax on documents. The Stamp Tax on Documents is an excise tax levied on certain documents exported, delivered or registered in Florida. The most common examples are: Chapter 201.02(a) of the Florida Statutes of 2017 contains the tax rates applicable to most instruments related to real estate or real estate interest, and Chapters 201.17-201.20 set out penalties for non-payment of required taxes, illegal use of stamps, and illegal tax avoidance. Taxes are paid either to the Florida Department of Revenue or to the county comptroller or circuit court clerk.
If one of the parties to the transaction is exempt from tax, the entire payment burden is borne by the non-exempt party. The stamp tax on documents is broad and could apply to any transfer of ownership. Concrete examples are: Florida Statutes § 201.02 levies a stamp tax on documents on transfers between spouses of encumbered real estate. When one of the spouses adds the other to an encumbered real estate deed, it often leads to a surprising result of the stamp tax on documents. In this case, a tax would be levied on half of the balance of the mortgage bonds. Recently, the elder law mailing list received a series of comments on document stamps regarding spousal transfers. This article briefly discusses this topic and provides an update on the current law. Loans from the Small Business Administration (SBA) are generally subject to Florida`s document stamp tax. However, the Florida Document Stamp Tax will be temporarily suspended for documents associated with small business financial support under Title I of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020. This suspension applies to documents executed on or after April 3, 2020. See Florida Department of Revenue Executive Order of Emergency Waiver/Deviation #20-52-DOR-003.
For more information, visit the COVID-19 General Tax Administration Program website. Florida imposes a stamp tax on deeds and other documents that transfer an interest in Florida real estate. Section 201.02 of the Florida Statutes governs certain transfers or transfers that are subject to stamp duty on documents. Taxpayers who paid $20,000 or more in stamp tax on documents in the last fiscal year (July 1 to June 30) will be required to pay electronically in the next calendar year. Taxpayers who must pay electronically are also asked to file a return electronically. To update your electronic registration, visit the ministry`s e-Services Registration website. Section 201.02 of the Florida Laws also contains limited exceptions to the stamp tax on documents. For example, no tax is levied on an act between spouses or former spouses who transfer part of their marital home in the context of divorce (§ 201.02(7)(a), Fla. Stat.).
BRIEF OVERVIEW: On July 1, 2018, amendments to the Documentary Stamp Tax Act came into force. This amendment created a new exemption from stamp tax on documents for certain instruments (i.e., deeds) that transfer encumbered real property (a/k/a real estate with mortgages) between newly married spouses in the first year of marriage […].
