Incredible! My state, Florida, has decided to reap additional taxes on those who have the unenviable position of having to do a Short Sale to save themselves from foreclosure or other financial ruin. Florida, like some other states, has a standard tax to the seller whenever there is a sale of real property. It is based on the sales price. Some states call this a "conveyance" tax. Florida calls it "Documentary Stamps on the Deed". It's a tax. The calculation is the sales price multiplied by .007, roughly. Thus, a sale of $300,000 would trigger taxes due at closing to the State of Florida for $2,100. What title agents, also called closing agents, have done up until now is to collect this tax based on the sales price in the contract. But now, in a letter dated August 7, 2008, the Florida Department of Revenue has made it clear to title agents that they must charge this tax on the sales price plus any forgiven debt. So, in the case where a home is sold for $300,000 and mortgage debt of $100,000 is cancelled, Florida wants an additional $700. Apparently, they want their money now. Thus, we have title agents scrambling to collect extra taxes on past closings. How are they going to get that money? I doubt the lenders will cough it up so quickly. And, who is really paying here? This extra tax might seem like a gold mine to Florida. It probably totals in the millions. Again, who is really paying this fee? I see it as opportunistic.
For example, what if a seller BROUGHT $50,000 to closing to cover his upside-down mortgage that was more than the sales price? They would tax that, too? Insanity. If that's what Florida wants to do, they should change the tax to be called "Documentary Stamps on the Seller's Mortgage", not the "Deed". Oh, wait. Then if the mortgage was less than the sales price they would lose money. They would never go for that.
P.S. If you want a copy of the letter, I'll gladly email it to you.
It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Search Destin Florida real estate and vicinity.
Short Sale Pre Foreclosure Help.
Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *State of Florida: Making Extra Money Off Short Sales* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.
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