What are Doc Stamps in Florida?

When I sold my home in Florida, I was charged for doc stamps. What are doc stamps?

In Florida, "doc stamps" refer to documentary stamp taxes. These are taxes that are imposed on various documents, including deeds, mortgages, and promissory notes, when they are recorded in official public records. When you sold your home in Florida and were charged for doc stamps, it likely means that you were responsible for paying the documentary stamp tax on the deed or other related documents associated with the property transfer.

Here's a breakdown of what these taxes are and how they work:

Deed Tax: When you sell a property, a deed is typically recorded to transfer ownership from you as the seller to the buyer. The state of Florida imposes a documentary stamp tax on the consideration (usually the sale price) of the property being conveyed through the deed. This tax is collected at the time the deed is recorded.

Promissory Note and Mortgage Tax: In addition to the deed tax, Florida also imposes documentary stamp taxes on promissory notes and mortgages. These taxes are typically paid by the borrower (mortgagee) and are based on the amount of the mortgage.

Rate of Tax: The rate of documentary stamp tax varies depending on the type of document and the amount involved. For example, as of my last update in September 2021, the deed tax rate is 70 cents per $100 of consideration, while the mortgage and note tax rate is 35 cents per $100 of the amount secured.

Payment Responsibility: The responsibility for paying documentary stamp taxes is usually determined by local custom and the terms of the real estate contract. It's common for the seller to pay the deed tax and the buyer to pay the mortgage and note tax, although this can be negotiated differently in the sales contract.

Recording: To make the property transfer and related financial agreements official, the documents (deed, mortgage, note, etc.) are recorded in the public records of the county where the property is located. The documentary stamp taxes are paid at the time of recording.

It's important to note that laws and rates may change over time, and specific practices can vary. When involved in a real estate transaction, it's a good idea to work closely with your real estate agent, attorney, or other relevant professionals to understand the tax implications and responsibilities associated with the sale or purchase of a property in Florida.