The Florida Department of Revenue has effectively made a bold move in response to the documentary stamp tax that is paid on real estate transfers involving short sales. In effect, not only is the "purchase price" to be include in the calculation, but the forgiven amount too.
FLORIDA DOCUMENTARY STAMP TAX • SHORT SALES
FLORIDA DEPARTMENT OF REVENUE
[DOR] ISSUES SHORT SALES DOC STAMP RULING
I've been thinking about this issue for a very long time.
Since short-sales have become so prevalent in our market are; the property
values appear to be declining more than normal. In reality, the short sales and
foreclosures are bringing values down geometrically. Apparently, the Florida
Department of Revenue (FDOR) issued its ruling stating that doc stamp taxes owed
on a deed should be based on the sale price paid by the purchaser. The DOR
ruling is effective immediately. Obviously, this matter was very important to
get resolve quickly!
In effect, the documentary stamps that are paid on the deed;
the result of this calculation was very deceptive, in Florida, when a property
is transferred often times the "sales price" is not visible in the public
records. What does appear is the amount paid in the form of documentary stamp
tax on the deed. by dividing .70 per $100 or .60 per $100 of value, [or portion
thereof] one can determine the purchase price. Now the documentary stamp tax on
the deed will reflect the purchase price, PLUS the amount forgiven by the
lender.
Which Documents Require Documentary Stamp
Tax?
Documentary stamp tax is levied on documents as provided
under Chapter 201, Florida Statutes.
Documents subject to the tax include:
- Deeds
- Bonds
- Notes and written obligations to pay money
- Mortgages, liens, and other evidences of indebtedness
Deeds
The tax rate for documents that transfer an interest in real
property is $.70 per $100 (or portion thereof) of the total
consideration paid, or to be paid, for the transfer. An
exception is Miami-Dade County, where the rate is $.60 per $100
(or portion thereof) when the property is a single-family
residence. If the Miami-Dade property is anything other than a
single-family residence, the tax rate is $.60 plus $.45 surtax
per $100 (or portion thereof).
<!-- <p>Prior to recording a deed or other instrument transferring interest in Florida real property, a <i>Return for Transfers of Interest in Florida Real Property</i> (<a href="/dor/forms/2006/dr219.pdf">Form DR-219</a>) must be filed with the clerk of the circuit court in the county where the property is located. </p> -->
Examples of documents that may transfer interest in real
property include:
- Warranty deeds
- Quit claim deeds
- Contracts for timber, gas, oil, or mineral rights
- Easements
- Contracts or agreements for deed
- Assignments of contract or agreement for deed
- Assignments of leasehold interest
- Assignments of beneficial interest in a trust
- Deeds in lieu of foreclosure
Consideration generally consists of:
- Money paid or to be paid
- Discharge of an obligation
- Mortgage or other lien encumbering the property
- Exchange of property
- Any other monetary consideration or consideration which
has value
When the consideration paid or exchanged for real property is
property other than money, the consideration is equal to the
fair market value of the real property.
A document that transfers an interest in real property
between a husband and wife may be subject to documentary stamp
tax. If the property is mortgaged, tax is generally due on half
of the outstanding balance of the mortgages encumbering the
property. Tax is generally not due if the property is not
mortgaged or if the marital home is transferred between former
spouses due to a divorce. |
Download the Technical Assistance Advisory Statement
DOR ISSUES SHORT SALES DOC
STAMP RULING
The Florida Department of Revenue (DOR) issued a ruling late yesterday stating
that doc stamp taxes owed on a short sale should be based on the sale price paid
by the purchaser and not on the sale price PLUS any amount forgiven by the home
seller's lender. DOR's ruling is effective immediately. A problem arose because
Florida law does not clearly explain doc stamp fees on a short sale;
consequently, local governments were making their own decisions and charging
different amounts. FAR stepped in to officially request a Technical Assistance
Advisory (TAA) from DOR, which would give Realtors a specific document that
explains the short sale doc stamp procedure. "Just like Florida Realtors, DOR
officials were concerned about how this issue could affect Florida homebuyers
and sellers and its potential impact on the real estate market's recovery," says
FAR Public Policy Representative Trey Price. "Advisories can sometimes take
months or even a year before a conclusion is made, however, so DOR's quick
decision illustrates their understanding of the importance of this issue." The
TAA is available at
http://www.floridarealtors.org/LegalCenter/HotTopics/index.cfm . Still have
questions? Contact FAR's Public Policy Office in Tallahassee at 850-224-1400.
THE INFORMATION FOUND IN
THIS REPORT WAS OBTAINED FROM THE FLORIDA ASSOCIATION OF REALTORS®,
THE FLORIDA DEPARTMENT OF REVENUE, IN PART.
• Aventura • Bal Harbour • Bay Harbor Islands · Fisher Island •
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• Hollywood Beach • Miami • Miami Beach • South Beach • Sunny
Isles Beach • The Waterways • Williams Island •
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SIB REALTY, LLC · 18206 COLLINS AVENUE • SUNNY ISLES BEACH, FL 33160
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The information found in this report has been
obtained from sources deemed reliable. No guarantee of the accuracy can be made.
Please refer to the related documents for specific details.
• Aventura • Bal Harbour • Bay Harbor Islands • Fisher Island • Golden Beach • Hallandale Beach •
• Hollywood Beach • Miami Beach • South Beach • Sunny Isles Beach • The Waterways •
SIB Realty, Llc • 18335 Collins Avenue • Sunny Isles Beach, Florida 33160
786-229-7999 CALL US TODAY! 305-935-3533
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