Documentary Stamp Tax for transfers

6 Replies

Hi Everyone, 

I've been receiving conflicting messages about this even from legal advisors and I wanted to check if anybody had an experience in this 

I recently purchased a property in Florida under my name and the mortgage is also under my name. I will be transferring the deed from my name to my existing sole-member FL LLC. but I will keep the mortgage under my name. (yes I'm aware of the due on sale clause but I'm not worried about it)

When I do the quit claim deed, I will pay for the recording fees to county. However, I'm not sure about below:

a) Do I pay any transfer tax to FL state? I assume yes because I have mortgage on the property.

b) Is this amount at 70cent for every $100 and assessed at FULL of my latest mortgage balance?

OR

c) Is this amount at 70 cent for every $100 and assessed at HALF of my latest mortgage balance?

I heard both options from different lawyers. 

also, how does FL state see my mortgage balance? do I submit them the latest mortgage statement as part of the filing? 

Appreciate your help if you went through this before. 

Thanks.

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Thank you @Ken Naim , appreciate the response. Is the latest mortgage balance just self-claimed and or you submit the latest mortgage statement as well as a back up to the calculation? thanks again

I am not sure that you will have any tax except the basic recording fees ($15~$30)

When you deed the property to your LLC there is no transfer of final beneficiary as you owned it 100%. So there should be no transfer tax. You will also need to notify the county property appraiser that you are still the beneficial owner to make sure that they won't reset the cap on the assessed value of the property for your property taxes.

Regarding the note, as you are not changing the name of the mortagee, there is no transfer of the note and there should not be any doc stamp.

Also, avoid the quit claim deed, use a warranty or special warranty deed instead. It will help keeping your title insurance. If later down the road you have a title issue that is anterior to the transfer, your LLC can 'sue' you, and you in turn can go back to your original title insurance. If you do a quit claim deed, unless your title insurance specifically allows it, you will have no more recourse as the LLC won't be able to turn against you as you made no warranty that the title was clear.

Last but not least, in Florida we have a great land trust statute. Have you considered deeding the property to a land trust where you are still the initial beneficiary? Then in a second step, just assign the beneficiary to your LLC.