When a deed is recorded in the public records, documentary stamps are due. If there is no consideration, minimal documentary stamps are $70. But the term ‘consideration’ includes much more than money itself. The State of Florida
Department of Revenue has a staff whose sole job is to search the public records for transactions that may have required documentary stamps, and to send audit letters and demands for payment if the correct documentary stamps were not paid.
Documentary stamps are due when a deed is recorded in the public records. The type of deed used is irrelevant. The same documentary stamp rules apply to a quit claim deed as to a warranty deed. Whether it is a transfer of the entire property or a partial interest in the property is also irrelevant, although in some cases the tax is based on the proportionate share of the property transferred.
Money paid is consideration. The balance of a mortgage that already exists and is either paid off as part of the transfer or remains on the property is consideration. If property is passed to a Grantor trust, and the beneficiary of the trust is the same as the owner of the property before the transfer the transaction is exempt, even if there is a mortgage. Passing property to or from a company, such as an LLC, is beyond the scope of this article.
If a married couple is divorcing, and one conveys the homestead property to the other, there is no tax on the mortgage balance. In the past, if a couple married, and the one spouse added the other spouse to property that had a mortgage, documentary stamps were due on one half the mortgage balance. That issue is now changed by Florida Statute, which provides that no documentary stamps are due on the mortgage balance when adding a spouse to homestead property.
When the clerk of court receives a document for recording, it does not determine whether documentary stamp tax is due, or paid, or paid correctly. If one owes documentary stamps and fails to pay them, and the Department of Revenue discovers it on an audit up to three years later, it charges interest and penalties.
Attorney Michael A. Pyle, of Pyle, Dellinger & Duz, PLLC, 1655 North Clyde Morris Blvd., Suite 1, Daytona Beach, Florida, 32117 Telephone: 386.615.9007. E-mail: firstname.lastname@example.org or website: www. pylelegal.com