Does anyone know if you have to pay documentary stamps on properties that you take "subject to" existing liens?
My attorney is advising me that I must pay doc stamps on the amount owed on the existing mortgages if a property owner deeds their property over to me with the mortgages still outstanding.
In the State of Florida doc stamps are typically paid on the amount of money paid for the property (consideration for the deed). My attorney is telling me I must pay the 0.7% transfer tax on the amount owed on the property instead of the amount of consideration shown on the deed (I was going to put $10 on the deed).
This is a huge factor in my costs since 0.7% of a mortgage could be substantially more when compared to paying 0.7% on $10 of consideration listed on the deed used to convey the property to me.
Thanks in advance!
A subject to purchase is no different than any other purchase. You get a deed and pay a price. For a subject to, your price is the amount of the mortgage you're taking over, plus any cash you pay to the seller. If there's a 0.7% of sale price tax on real estate, you owe 0.7% of the amount of the mortgage.
Liuke Jon stated, yoy must pay a price for the deed transfer. The amount is based on your purchase contract. If the mortgage was $100k and you were giving buyer $25k, your contract for purchase is $125k and transfer taxes are based on that price.
From the Florida statutes:
Documentary stamp tax is imposed under section 201.02, Florida Statutes (F.S.), on documents that transfer interest in Florida real property. The tax rate is $.70 per $100 (or portion thereof) of the total consideration paid, given, or to be paid or given, for the transfer. Miami-Dade County is an exception, where the rate is $.60 per $100 of consideration (or portion thereof) when the property is a single-family dwelling. If the Miami-Dade property is anything other than a single-family dwelling, the tax rate is $.60 plus $.45 surtax per $100 of consideration (or portion thereof).
Examples of documents that may transfer an interest in real property include:
â€¢ Warranty deeds
â€¢ Quit claim deeds
â€¢ Contracts for timber, gas, oil, or mineral rights
â€¢ Contracts or agreements for deed
â€¢ Assignments of contract or agreement for deed
â€¢ Assignments of leasehold interest
â€¢ Assignments of beneficial interest in a trust
â€¢ Deeds in lieu of foreclosure
Consideration generally includes, but is not limited to:
â€¢ Money paid or to be paid
â€¢ Discharge of an obligation
â€¢ Mortgage or other lien encumbering the property
â€¢ Exchange of property
â€¢ Any other consideration which has value
When the consideration for real property includes property other than money, the consideration is presumed to be equal to the fair market value of the real property.
Tax is due on the total consideration for the transfer regardless of the consideration shown on the face of the deed or other document that transfers the property.
Tax is due on the total consideration for the transfer regardless of the consideration shown on the face of the deed or other document that transfers the property.Exactly and this is reflected in the pruchase contract, so base your transfer tax costs on that.
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