July 1, 2019 was a very good day for Florida couples whose home is owned by only one spouse. 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 that home 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 his home in 2016 for $350,000, and obtained a mortgage for $300,000.00. He married in 2017, and wanted to add his spouse to the title. to create 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 all of his children.
Florida law required collection of documentary stamps based upon one-half of the mortgage balance (in our example, approximately $900.00 in Miami-Dade, $1050.00 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 the vast majority of couples, since most had been married for a long time. In many cases, the cost of the conveyance inhibited the transfer.
Florida Land Title Association (FLTA) has been working with the Legislature for many years to fix this unfair burden upon couples. Fortunately, Senator Kelli Stargel and Representative Clay Yarborough recognized this injustice, and 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.
FLTA has been advocating for the property rights of Floridians for over one hundred years. The Association is comprised of title agents, title underwriters, attorneys, and affiliates, all of whom proudly state that FLORIDA RUNS ON TITLE INSURANCE TM
For more information about FLTA, visit us at www.flta.org.