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Short Sales- Florida State Documentary Stamp Tax Upon Transfer Of Property

By
Real Estate Agent with The Gasset Group & Get It Done For Me Virtual Services 13253167-SA00

Are you ready for another hurdle in the already cumbersome short sale transaction? If your property is in the state of Florida you may just be subject to additional tax at the closing or after the closing.

Florida Documentary Stamp Tax on short sales

In the state of Florida we do NOT have any income tax. One of the biggest income generators for the state of Florida is in the collection of Documentary stamp tax paid on the notes and deeds in the transfer of Real Property in our state.

There is now a dispute with the Department of Revenue of the state of Florida in regards to how this is calculated in a short sale transaction.

What has happened is that at the closing the Doc Stamp Tax is paid by the seller in Palm Beach County  on the deed. This is how it has always been on any transfer of real estate. You calculate the amount of the deed with 70/100 and come up with the amount that is paid at closing for this tax.

Well, all of a sudden the state is saying they want the title companies to charge the stamp tax not just on the deed but on the forgiven amount as well. We have never heard of such a ridiculous statement. As if it is not hard enough to do a short sale as it is. If the third party lenders refuse to pay this additional amount and the seller does not have the money to pay it, this becomes a broken dea.

 This is just a disaster waiting to happen unless the state backs off and realizes that these homeowners are mostly in foreclosure status already, they don't have the extra money to pay.

This is also going to be hard to enforce and also to calculate. What is the state going to use as the standard as to what was owed in the first place? It really makes no sense. If the IRS can forgive the debt than the state should as well.

The Florida Association of Realtors talked at length with the Department of Revenue, the Attorney General's office for the state of Florida and the Governor's office to let them know what a disaster this can turn into. Do they really want even more distressed properties? This will shut down the short sale transaction and lead to an even softer market than we are already experiencing. FAR was in a 2 hour meeting with 8 employees of the DOR and the head of the agency and their counsel.

Please be advised that this one page letter that went out throughout the state of Florida on the DOR letterhead was written by one employee of the DOR ( Hmmm, what was that person thinking, or NOT!) and stated that the tax is due on the higher amount. This opinion was based on a phone call made to the help line.

This is NOT the official position of the Department of Revenue.

FAR has been helping and offering to educate the staff of the DOR to understand what a short sale is and why they are killing the deal with a position such as this. FAR has also requested the DOR to participate in a TAA, A Technical Assistance Advisory to develop a form to use for short sales.

Florida Association of Realtors has been working for about a month on this issue. While we hope the outcome will be what makes sense with the only the deed amount being taxed, it may also not turn out the way we want it to. If it turns out to be an adverse decision FAR will immediately explore "amnesty" avenues in the state Legislature on past short sale transactions.

FAR just received a notice this week that the DOR will have  the TAA ready soon. Most of the time these kinds of advisories take a long time to complete. The expedient manner in which the DOR worked on this hopefully shows that they know we are facing a serious issue with short sales being successful here in the state of Florida.  Please stay tuned as we find out the details to this important topic.

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Contact Nestor Gasset and Katerina Gasset, CIPS, Realtors®, International Properties and Investments, Inc. Licensed Realtors® in Florida at 561-753-0135 to list your property for sale or to purchase a property in Wellington, Royal Palm Beach, Loxahatchee, Lake Worth, Hypoluxo Island, Lantana, West Palm Beach and the rest of Palm Beach County Florida and Port St Lucie Florida. We are accepting referrals.

Call us today at 561.753.0135 or Toll Free 800.444.3316. Contact us by email if you prefer by clicking on email me on the right side of this page under our profile.

To view all the Wellington Florida Luxury Homes For Sale Click here and then click on Search For Homes We know Palm Beach County and St Lucie Country; we will help you get your home Sold if you need to Sell your home and help you buy your Wellington Home or Land ; call us today.

Disclaimer:The information provided herein is supplied by several sources and is subject to change without notice. Wellington Homes Blog does not guarantee or is any way responsible for its accuracy, and provides said information without warranties of any kind, either express or implied. Entries on Wellington Homes Blog represent the opinions and ideas of the author(s). Wellington Homes Blog does not express the views of International Properties and Investments, Inc or those of the broker.

P.S. If you are listing your home as a short sale in Palm Beach County Florida and Port St Lucie Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 561-753-0135 to find out more about Palm Beach County Short Sales and Port St Lucie Short Sales.

Copyright © 2008 By Katerina Gasset, All Rights Reserved.* Short Sales- Florida State Documentary Stamp Tax Upon Transfer of Property*

 

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In real estate we service Utah County, Salt Lake County, Wasatch County, Tooele County. This includes many towns and cities. Some of which are: Provo, Orem, Salt Lake City, Draper, Springville, Spanish Fork, Payson, Lehi, American Fork, Vineyard, Saratoga Springs, Eagle Mountain, Pleasant Grove, and more. 

Katerina Gasset is a real estate agent who is also a digital marketing strategist, website designer and consultant for real estate brokerages, agents, entrepreneurs and small business owners. She is also the owner of Get It Done For Me Virtual Services. 

Katerina is a Certified AI Marketing Specialist. She can help you with ChatGPT, Content at Scale, Neuronwriter, prompting, and many other AI tools. 

She develops products and online courses to empower real estate agents to reach their marketing, SEO, social media and branding goals. Katerina Gasset is a blogger, author, podcaster, and keynote speaker.  

Text Katerina with your name + number to work with her:

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Comments(8)

Scott Barr
Pacific Sotheby's international Realty - Newport Beach, CA
Realtor

I can see how this will be a problem. I think its too soon for any state to try and capitalize on this real estate market. They should let us sell through some this inventory before making the process more "taxing" then it already is.

Sep 08, 2008 06:35 AM
Katerina Gasset
The Gasset Group & Get It Done For Me Virtual Services - Provo, UT
Amplify Your Real Estate & Life Dreams!

Scott- Some title companies won't even write on these shorts now. Good thing we have a great title company with good attorneys who can weed through this jungle. Nothing like kicking you when you are already down!

Sep 08, 2008 06:41 AM
Janice MacMillan
ERA Joyner Realty - Valdosta, GA
Associate Broker

Unbelievable...that is really taking advantage of a situation to earn a buck. They should be ashamed of themselves.

Sep 08, 2008 07:14 AM
Lola Audu
Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate - Grand Rapids, MI
Audu Real Estate~Grand Rapids, MI ~Welcome Home!

Katerina, Wow!  This could get really interesting.  I hope this type of thinking does not spread across the country.  In an already difficult situation, this type of additional financial hurdle could be very difficult to overcome.  I hope the negotiations are successful. Homeowners are already going through a lot.

Sep 08, 2008 08:52 AM
Kim Peasley-Parker
AgentOwned Realty, Heritage Group, Inc. - Sumter, SC

Katerina-  This sounds like a big mess about to happen.  You make a good point that many of these sellers are already facing foreclosure and if they had any money they wouldn't be selling their home at a short sale. 

Sep 08, 2008 12:16 PM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Katerina, I have 2 short sales closing this week and on both I'm eating the extra doc stamps!!! It sucks but I just got the deals approved and I'm not taking them back to the the table at this point. The calculation was pretty simple. We just ordered a payoff and paid the tax on that amount. I am sure this tax will be overturned as it makes absolutely no sense at all.

Sep 08, 2008 12:36 PM
Michael Sahlman
www.HomesForVIPs.com - Keller Williams Realty - Miami Beach, FL
e-PRO - Miami Beach Florida Luxury Homes

The Florida Dept. of Revenue is one of the worst culprits when it comes to levying fines and fees. Let's hope that the state kicks this in the butt.

Sep 09, 2008 01:10 AM
Lynn Pineda
eXp Realty - Boca Raton, FL
Real Estate Promises delivered in SE Florida

Katerina,  I had the effect of the new doc stamp calculation hit a recent short sale closing of mine and thank goodness there wasn't a great discrepancy and the Seller had the extra $100 dollars to put forth. I've spoken with the Dept of revenue who claim it's still under review as to whether or not this will indeed be set in stone yet in the meantime, pay up. If they later decide to not proceed on mortgage balance than those who paid the higher tax can apply for a refund - ha, a refund!

Sep 09, 2008 01:48 PM