A Gift for Newlyweds
Prior to July, 2018, if a newly married individual wanted to add their spouse to the title of his or her home, the individual would need to sign and record a deed granting title from the individual to the married couple. Recording that deed requires the payment of a documentary stamp tax if the property is mortgaged, and most properties are. Even though no money is exchanged between the married couple, the tax is required as the Florida Department of Revenue assesses a tax on the discharge of an obligation. The idea behind this is that two owners are now responsible for the debt obligation of the home, even though legally speaking the obligation for the debt is confined to the person who executed the Note.
In July of 2018, Florida’s legislature decided to give newlyweds a gift by establishing an exemption for the circumstance described above. Taxes were already exempt upon the conveyance from one spouse to the other pursuant to an action for dissolution of marriage. The exemption now applies in the circumstance listed above, where there is a conveyance of homestead property between spouses and the only consideration for the conveyance is the amount of the mortgage existing on the property at the time of the conveyance, so long as the newly married couple records the conveyance document within one year after the date of the marriage.
So, in sum, this is a win for newlyweds in Florida, however take action swiftly in order to comply.
Scott Marcus is a real estate partner and shareholder at the Becker firm. Scott’s practice encompasses residential, commercial real estate acquisitions and dispositions as well as title insurance.