Documentary Transfer Tax: What is it?

Document Transfer Tax can be confusing for anyone selling and buying real estate. It is not meant to be but the details of who pays, when and why can be.  

Documentary transfer taxes are  conveyance taxes, mortgage transfer taxes, documentary stamp taxes, and property transfer taxes.  They are set by state, county, city municipality and lender every time real property is exchanged, transferred or sold though public records. The amounts varies depending on the state.

Each state and jurisdiction has its own requirement if buyer or seller pays the documentary transfer tax.  In Florida, the transfer tax for the deed is paid by seller and if there is a mortgage the transfer tax is paid by buyer. If you are selling or buying in another state here is a list of  Real Estates Transfer Taxes.  The National Conference of State Legislature published this list and it is not legal advice rather a guideline.

There are some exceptions to documentary transfer tax and they are below in  Florida:

The taxes shall not apply to: (1) a transfer of real property from a nonprofit organization to the Board of Trustees of the Internal Improvement Trust Fund, to any state agency, to any water management district, or to any local government; (2) a deed, transfer, or conveyance between spouses or former spouses pursuant to an action for dissolution of their marriage; (3) a contract to sell the residence of an employee relocating at his or her employer's direction or to documents related to the contract, which contract is between the employee and the employer or between the employee and a person in the business of providing employee relocation services

Cite:   Lincoln Institute