Documentary stamps and the intangible tax

Florida has no income tax, so the state collects at the moments when money changes hands, and the biggest of those moments for a household is a real estate closing. Every deed recorded in Florida carries a documentary stamp tax of $0.70 per $100 of the price, every mortgage carries a second stamp tax of $0.35 per $100 of the loan, and every new mortgage carries a nonrecurring intangible tax of two mills, $0.002 on each dollar borrowed. On a $450,000 house with a $360,000 loan, that is $5,130 of state tax collected at the table, paid once, and never seen again.

None of it is deductible on the federal return. That surprises people who have just moved from a state where the closing statement produced an income tax deduction. Transfer taxes and stamp taxes are capital costs: the buyer’s share goes into the basis of the house and the seller’s share reduces the gain on sale. The only closing-table item that is deductible in the ordinary sense is the property tax prorated between the two parties, and the rule for that is stranger than most people expect. This article walks through each line in the order it appears on the settlement statement.

The stamp tax on the deed

The documentary stamp tax on a deed is Florida’s transfer tax. Chapter 201 of the Florida Statutes imposes it on any document that transfers an interest in Florida real property, which means a warranty deed, a quitclaim deed, a deed in lieu of foreclosure, a contract for deed and an assignment of one, and the transfer of a leasehold. The Department of Revenue’s brochure GT-800014 gives the rate as $0.70 per $100, or portion thereof, of the consideration. The words “or portion thereof” mean the price is rounded up to the next $100 before the rate is applied: a $425,050 sale is taxed as $425,100, or 4,251 hundreds, for $2,975.70.

Consideration is the price in the broad sense. It includes cash, the value of anything else given, and any mortgage the buyer assumes or takes subject to. A deed from a parent to a child for $10 and love and affection, with no mortgage on the property, owes only the minimum tax on $10. The same deed with a $200,000 mortgage still in place owes stamps on $200,000, because the child has taken the property subject to the debt and the debt counts as consideration. Certain deeds of a homestead between spouses are exempt under a specific rule, and transfers to and from governments are exempt; Chapter 201 lists the rest.

The tax is paid to the clerk of court when the deed is recorded, which is why the title company collects it at closing. A deed that is never recorded still owes the tax, directly to the Department on Form DR-228, and the penalty for a late payment is 10% a month to a maximum of 50%. In practice the clerk will not record a deed without the stamps, so the problem is rare.

Miami-Dade is different

Miami-Dade County has its own rate structure, written into the same statute. The state rate there is $0.60 per $100 instead of $0.70, and a county surtax of $0.45 per $100 is added for any property other than a single-family residence. The result is that a single-family house in Miami-Dade is taxed at $0.60, lower than the rest of the state, while a condominium, a duplex, a commercial building or vacant land is taxed at $1.05, half again higher. The surtax funds the county’s affordable housing program, and the single-family carve-out was the price of getting it enacted. A $450,000 house in Coral Gables owes $2,700 in deed stamps; a $450,000 condominium on Brickell owes $4,725. Nowhere else in Florida does the kind of property change the rate.

The stamp tax on the note, and the intangible tax on the mortgage

A financed purchase produces two more documents, the promissory note and the mortgage that secures it, and the state taxes the borrowing twice. The documentary stamp tax on notes is $0.35 per $100 of the amount promised. For an unsecured note, a personal loan or a retail installment contract, the tax tops out at $2,450, which is the stamps on $700,000. For a note secured by a recorded mortgage there is no cap; the tax runs on the full amount of the debt. A $360,000 mortgage owes $1,260.

The nonrecurring intangible tax is a separate tax under Chapter 199, levied once on each new obligation secured by a mortgage or lien on Florida real property, at two mills, or $0.002 per dollar. On the same $360,000 it is $720. The word nonrecurring is historical: until 2007 Florida also had an annual intangible tax on stocks and bonds, the recurring kind, and the one-time mortgage tax is what survived its repeal. The Department’s page says the lender is the taxpayer liable for it, and the same sentence says the lender may pass it on to the borrower, which every lender does. It is collected by the clerk when the mortgage is recorded; a mortgage not recorded within 30 days must have the tax paid directly to the Department (verify). The tax is figured only on the part of the debt secured by Florida property and cannot exceed the property’s fair market value, which matters for a line of credit secured by a house worth less than the credit limit.

A refinance pays both taxes again on the new loan, because the new note and the new mortgage are new documents. There is a partial relief: when a mortgage is refinanced with the same lender and the new mortgage says so, the stamp tax and intangible tax are due only on the amount by which the new principal exceeds the old unpaid balance. A refinance that moves to a different lender gets no such credit and pays on the whole loan, which on a $400,000 refinance is $1,400 of stamps and $800 of intangible tax that a borrower shopping rates should put into the comparison. A home equity line owes both taxes on the credit limit when it is recorded, not on the amount drawn.

Where it goes on the federal return

The stamp tax on the deed is a transfer tax, and Publication 530 lists transfer or stamp taxes among the settlement costs a buyer adds to the basis of the home, alongside recording fees, abstract and title search fees, the owner’s title policy and legal fees for the deed. A buyer who pays them gets no deduction now and a larger basis later, which reduces the gain when the house is sold, usually inside the $250,000 or $500,000 exclusion where it makes no difference at all. A seller who pays them, which is the Florida custom, treats them as a selling expense that reduces the amount realized. Either way the tax is a capital item, never an itemized deduction. The state and local tax deduction on Schedule A covers income, sales and property taxes; a transfer tax is none of those.

The note stamps and the intangible tax are different again. They are costs of obtaining a loan, and Publication 530 is explicit that charges connected with getting or refinancing a mortgage, which it lists alongside loan assumption fees, credit reports, appraisals the lender requires and mortgage insurance premiums, are neither deductible nor added to basis. Publication 551 says the same from the basis side. The $1,980 in the example is simply gone. There is a narrow exception for a loan on a rental property, where loan costs are amortized over the life of the mortgage as a rental expense; for a personal residence there is nothing.

Property tax is where the closing statement finally produces a deduction, and the rule does not follow the money. Publication 530 says the seller is treated as paying the property tax up to the day before the sale and the buyer from the date of sale, whoever actually wrote the check. Florida bills in arrears, in November for the calendar year, so a June closing happens before the year’s bill exists. The title company estimates the year’s tax from last year’s bill, charges the seller for the days from January 1 through the day before closing as a credit to the buyer, and the buyer later pays the whole November bill. The seller deducts the credited share. The buyer deducts the share from the closing date forward, and the part of the November bill that covered the seller’s days is not a deduction for the buyer; it was reimbursed through the credit. Software that takes the full November bill as the buyer’s deduction gets this wrong, and so does software that takes nothing because the seller paid no bill in the year of sale.

Two more consequences follow from the lack of an income tax. The SALT deduction, $40,400 for 2026 for most filers, is for a Floridian entirely property tax plus either sales tax or nothing; there is no state income tax to fill it. A household that bought in June and paid a half year of property tax may be better off taking the sales-tax election on Schedule A, using the IRS tables plus the actual sales tax on a car or boat bought that year, and adding the property tax on top. And the first-year buyer who pays the November bill in full should keep the closing statement with the tax return, because the November bill and the deductible share are different numbers and the statement is the only place the difference is written down.

Who pays what, and why the custom varies

Florida contracts, including the FAR/BAR form most residential sales use, let the parties allocate every closing cost. When they do not, custom fills the gap, and the custom is that the seller pays the deed stamps and the buyer pays the note stamps, the intangible tax and the recording fees. The custom on the owner’s title policy, which is the largest closing cost after the stamps, flips county by county: the seller pays in Sarasota, Manatee and a handful of west-coast counties, the buyer in Miami-Dade, Broward, Pinellas, Hillsborough and most of the rest. Whoever pays the title policy usually picks the title company, which is why the custom matters to the agents more than to the tax.

For a cash buyer the picture is simpler: no note, no mortgage, no stamps on either, no intangible tax. The only Florida tax on a cash purchase is the deed stamps, which the seller customarily pays. That is one reason Florida cash sales close faster and cheaper than financed ones, and one reason a seller may accept a lower cash offer. New construction is the other exception: builders commonly shift the deed stamps to the buyer in their own contracts, and a buyer of a new home should expect to see $0.70 per $100 on the buyer’s side of the statement.