Florida Documentary Stamp Tax (Doc Stamps) and a 1031 Exchange

Deed stamps are computed on the full price, mortgage included

Section 201.02(1)(a), Florida Statutes sets the deed tax: "On each $100 of the consideration therefor the tax shall be 70 cents." The same subsection defines consideration to include "money paid or agreed to be paid; the discharge of an obligation; and the amount of any mortgage," so a buyer taking a property subject to an existing loan pays stamps on the loan balance as well as the cash.

The Department of Revenue's documentary stamp tax page restates the list and adds property exchanges, real or personal, to it. Recorded deeds are taxed when recorded; an unrecorded transfer must be reported by the 20th of the following month. The page is also explicit on who owes it: "All parties to the document are liable for the tax regardless of which party agrees to pay the tax."

Florida has no state income tax on individuals, so the deed stamp is the state's main take on a sale and the one cost in a Florida exchange that nothing defers. The rest of Florida's rules for exchangers, including the non-homestead assessment reset on a change of ownership, are on 1031 exchange rules in Florida.

Miami-Dade charges a surtax on everything except a single-family dwelling

Section 201.031 authorizes a county surtax on deeds, and the Department's page gives the Miami-Dade figures: "60 cents on each $100" plus "a surtax of 45 cents on each $100," for $1.05 per $100 in total. The statute carves out documents that involve "only a single-family residence," so a Miami duplex, condo building, warehouse or retail center pays the surtax and a single-family rental house does not.

The split matters for investors comparing a sale in Miami-Dade with one in the other 66 counties. Hypothetical: a $3,000,000 apartment building in Miami carries $31,500 of deed stamps and surtax; the same price in Orlando carries $21,000. A $3,000,000 single-family rental in Miami pays only the 60-cent rate, $18,000.

Because consideration in an exchange is the fair market value of what is transferred, a direct swap between two owners does not escape the surtax either. Rule 12B-4.013(1) states that in an exchange "the consideration for each deed is the fair market value of the property transferred, plus any other consideration."

The replacement purchase brings note stamps and the intangible tax

When you buy replacement property in Florida with a new loan, two more taxes appear on the buyer's side. Section 201.08(1)(b) taxes a mortgage at "35 cents on each $100 or fraction thereof of the indebtedness," and the $2,450 cap in section 201.08(1)(a) applies only to unsecured notes. Section 199.133 adds "a one-time nonrecurring tax of 2 mills" on each dollar of a note secured by a Florida mortgage.

Hypothetical: you sell a $1,000,000 rental in Tampa and buy a $1,500,000 building in Jacksonville with a $900,000 loan. The sale produces $7,000 of deed stamps. The purchase produces $10,500 of deed stamps on the new deed, $3,150 of note stamps and $1,800 of intangible tax on the mortgage. Who pays which line is set by the contract; the statute makes every party liable if it is not paid. Run your own numbers with your CPA.

The deed stamps on both legs are costs of the transfer and can be paid from exchange funds as exchange expenses. Loan costs are different: note stamps and intangible tax are costs of borrowing, and paying them from the intermediary's account is treated on loan fees and points paid from exchange funds. The distinction is drawn generally on closing costs paid from exchange funds.

No exchange exemption, and the entity shortcuts are closed

Chapter 201's exemptions are specific: transfers to governments, certain spousal and dissolution transfers, and deeds to a trustee where beneficial ownership does not change under Rule 12B-4.013(25). None refers to section 1031. Direct deeding from you to the buyer and from the seller to you means one taxable deed on each leg, and that is the cheapest result available; a qualified intermediary taking title would only add deeds.

Moving the property into an LLC before the sale does not avoid the tax either. Section 201.02(1)(b) taxes a transfer to a "conduit entity" for less than full consideration when an interest in that entity is sold within three years, "at the rate of 70 cents for each $100" of the consideration for the interest. That provision also reaches partnership and LLC restructurings done ahead of an exchange, so review it alongside drop-and-swap 1031 strategies.

A reverse exchange in Florida produces two deeds on the replacement property: the seller to the accommodation titleholder, then the titleholder to you. Florida's statute taxes each document on its consideration, and the trust rules in 12B-4.013(25) exempt only transfers that leave beneficial ownership unchanged, so the second deed should be reviewed with Florida counsel before the structure is chosen; the reverse exchange mechanics are on the reverse 1031 exchange guide.

Reading the stamps on the settlement statement

On the sale, the deed stamps appear as a seller debit on the settlement statement in most Florida contracts; on the purchase, the buyer's statement will show deed stamps if the contract assigns them to the buyer, plus note stamps and intangible tax on any new mortgage. Each line should be labelled by document, because the intermediary needs to know which costs are exchange expenses and which are loan costs. How to read those lines is on reading a settlement statement for a 1031 exchange.

If the replacement property is a DST interest rather than a Florida deed, no Florida deed stamps are paid by you on the purchase; the trust paid them when it bought the property. Florida's own rules for exchangers, and the states whose transfer taxes behave differently, are collected on the closing hub.

• Sale deed: 70 cents per $100 of price including any assumed mortgage; Miami-Dade 60 cents plus 45-cent surtax except single-family.
• Purchase deed: same rates on the replacement price, allocated by contract.
• New mortgage: 35 cents per $100 of note stamps plus 2 mills intangible tax, with no cap on secured notes.
• Entity transfer within three years of a no-consideration contribution: taxed at 70 cents per $100 on the interest sold.