Deed Taxes on Florida Short Sales

This one’s a real hoot.  Is the state of Florida looking for additional revenue?

On August 8, 2008 the Florida Department of Revenue issued opinion letters to Stewart and Fidelity, two major title insurance underwriters, stating that additional doc stamps were owed on short sale transactions.

Basically, the Florida DOR was suggesting that when any seller with a $200,000 mortgage sells the property for $100,000 on a short sale, that seller should pay doc stamps on the deed at the $200,000 price.  And this even though the actual sales price was $100,000!  While this is an interesting concept and would surely raise much needed revenue for the state of Florida, it would also skew the property appraiser’s records because the property appraiser checks the doc stamps to determine market values.

The Florida Department of Revenue has now written a letter on September 23, 2008 rescinding that position.  Doc stamps on the deed on the short sale described above will be based on the $100,000 sales price.  

Here is the letter: Florida Deed Taxes on Short Sales