FLTA Assists Florida Legislation Saving Thousands for Married Couples

August 6, 2019

By Scott Merritt

Florida couples whose home is owned by only one spouse may want to toast July 1 as a good day. While many of us are familiar with the tax benefits provided for the homestead property, few realized that Florida statutes imposed a hefty charge when one spouse wanted to transfer a property to the other. F.S.201.02(7)(b) used to require that a conveyance between spouses of the homestead property was subject to the payment of documentary stamps, based upon the amount of the underlying mortgage.

Assume that a single man bought a home in 2016 for $350,000 and obtained a mortgage for $300,000. He married in 2017 and wanted to add his spouse to the title by creating a tenancy by the entireties, which provides a right of survivorship and protection from certain creditors. If he did not add the spouse, then, if he passed away, the house would be divided among the spouse and his children.

Florida law required collection of documentary stamps based upon one-half of the mortgage balance (in our example, approximately $900 in Miami-Dade and $1,050 in all other counties). Interestingly, there was an exemption from taxation for the conveyance of the homestead when the parties were involved in a divorce. In 2018, the legislature made a partial fix by exempting those couples who executed the deed within one year of marriage, however, that bill did not resolve the problem for most couples, since most had been married for a long time. In many cases, the cost of the conveyance inhibited the transfer.

The Florida Land Title Association (FLTA) has worked with the legislature for many years to fix this unfair burden upon couples. Fortunately, Sen. Kelli Stargel and Rep. Clay Yarborough recognized this injustice. They were able to sponsor an amendment to F.S.201.02(7) in this recent legislative session. The statute now provides an exemption from documentary stamps in all counties for any intra-spousal conveyance of the homestead. So, if you have been waiting to add your spouse because you could not spend the money, now is the time.

Scott Merritt is executive director of the Florida Land Title Association. He can be reached at scott@flta.org.

Contact ALTA at 202-296-3671 or communications@alta.org.

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