Doc stamps give the real price

0:29The tax is on consideration, and the rate is fixed

Start with what the tax is on. Consideration, at a fixed rate.

Documentary stamp tax is an excise tax on documents that transfer an interest in Florida real property, and on written obligations to pay money. It's paid to the county recording official when the document is recorded.

The rate on a deed is 70 cents on each $100, or portion of 100, of the total consideration. That's every county except Miami-Dade. Miami-Dade charges 60 cents on each 100 and adds a surtax of 45 cents on each 100, with the surtax not due where the document transfers only a single family dwelling.

The rate on a mortgage or other written obligation is 35 cents on each 100 of the amount secured. There's no cap on the tax due on a mortgage. There is a cap of $2,450 on a note.

And all parties to the document are liable for the tax, whichever of them agreed to pay it. If one party is exempt, the other has to. So the figure isn't a matter of who filled the form in.

1:35The arithmetic, both ways

Now, the arithmetic. Two divisions, and they answer different questions.

From a deed, multiply the stamp tax by 100 and divide by 70 cents, outside Miami-Dade. So stamps of $5,600 mean consideration of 800,000. Stamps of 1,260 mean 180,000, which is the Department of Revenue's own worked example of a $30,000 down payment and $150,000 purchase money note.

From a mortgage, multiply by 100 and divide by 35 cents. Stamps of 1,750 mean an obligation of 500,000 secured by the instrument.

The rate is charged on each 100, or portion of 100, so your answer is the consideration rounded up to the next $100. Close enough to be useful. Rounded, so quote it as an approximation.

Now here's the reading I promised you. It's the single most useful number on the instrument, and it's the smallest one that can appear.

2:40Seventy cents means a gift

70 cents means a gift.

Where an unencumbered property is transferred for nominal consideration, the Department's examples put the tax at 70 cents. A transfer of a $400,000 parcel to a new spouse, and a transfer of a $1,000,000 parcel to the transferor's children, both produce 70 cents, where the deed recites love and affection and $1. Or $10 and other good and valuable consideration.

So a deed carrying 70 cents of stamps records a transfer for no consideration, of a property with no mortgage on it. Which is a fact to read against the voidable transfer sections, rather than a curiosity.

3:26What consideration includes, which is more than the price

Now, what consideration includes. Which is more than the price.

It's defined widely enough that the figure you derive isn't the cash that changed hands.

It includes money paid or agreed to be paid. It includes the discharge of an obligation and the exchange of property. And it includes the mortgage, lien or other encumbrance on the property, whether assumed or not. Where the property carries a mortgage, the balance at the time of transfer is consideration for the transfer.

Two consequences follow. A deed in lieu of foreclosure is taxed on the debt discharged, which the Department's example puts at $225,132.75, even where the property is worth less. And a transfer of an encumbered property between relatives for no money still carries stamps, computed on the mortgage balance. So the tax on that deed is evidence of the debt, rather than of a price.

And where property is exchanged for something other than money, the consideration is presumed to be the fair market value of the property transferred.

4:36What pays nothing at all

So what pays nothing at all.

A deed with no stamps is a category rather than an absence, and the categories are listed.

No tax on a deed between spouses where the property is homestead and the only consideration is a mortgage or other lien encumbering it. No tax on a deed between spouses or former spouses after a dissolution of marriage, where the property was the marital home at the time of the divorce. No tax on a transfer under threat of eminent domain or condemnation. And no tax on a personal representative's deed given under a duly probated will.

And the Department states plainly that there's no exemption for a transfer made for estate planning purposes. So the absence of stamps points at a short list of situations, and estate planning is not on it.

5:30How to check it yourself

So how do you check it yourself. Three steps, and the third is the one that stops your figure being taken for a price.

Pull the recorded deed and read the stamps off the instrument, rather than off an index summary. Then divide by the rate for that county, remembering Miami-Dade runs at 60 cents with a separate surtax line.

Then compare your result against the sale price on the property appraiser's record page. Broward states that the price it publishes is calculated from the documentary stamps paid at recording, because state law requires that. It also states that where the stamps paid were wrong, the office will note a corrected closing statement internally, and will not update the price on its website.

Then check whether a mortgage was recorded the same day. Because if one was, part of the consideration is that debt rather than money, and your derived figure is the sum of the two rather than the cash paid.

6:38What this does not cover

Here's what I'm not covering.

Any state other than Florida. And the accuracy of the stamps themselves.

New York charges its own transfer taxes, and collects sale prices through a separate return on a different basis. None of the rates or rules I just gave you apply there. And within Florida, your derived figure is only as good as the tax that was paid, which is the taxpayer's own computation, and the Department's penalty provisions exist because it's sometimes wrong. A deed is taxable whether it's recorded or not, so a transfer that never reached the register produced a liability without producing a public record of anything.

I'm not a lawyer and none of this is advice. Whether a particular transfer was for reasonably equivalent value is a question for counsel, and it turns on an appraisal rather than on a tax line.

What I can tell you is narrower. The deed reciting $10 was taxed on something. And how to find out what.

So the next time a Florida deed recites $10, do the division yourself. And if the answer comes out looking like a gift, the piece on transfers after a judgment is where that leads.