OK so the Department of Revenue in Florida has decided to charge Documentary Stamps (tax) on the amount of mortgage forgiveness related to short sales. Doc Stamps in Florida are charged at the rate of $.70 per every $100 on the Deed of every real estate transaction.
For example: If you sell your house for $100,000 the seller pays $700 in doc stamps.
Now what the State is saying is that if you sold that same house for $100,000 BUT it was a short sale where the Lender forgave $50,000 the tax due is now $1,050!!!
So this brings up some interesting questions.
How many out of State lenders are going to be willing to give the “forgiveness” amounts to the title company?
How is this going to affect future appraisals where the appraiser relied on Doc Stamps as an indicator of sale price?
What about a closing where the Seller brings money to closing? Will they too have to pay Doc Stamps on their mortgage balance instead of the sales price?
Will the Department of Revenue ever get their head out of their ass?
Oops!! Did I just say that? Oh well…..what say you?