WHAT IS A STATE DOCUMENTARY STAMP?

WHAT IS STATE DOCUMENTARY STAMP?

 

Just as buying most things in life involves paying state taxes, so real estate transactions involve the payment of state taxes at closing. Any time you transfer a property deed to another owner, the state requires the payment of a tax on the deed, therefore, the state will impose taxes on the transfer of title of real property. In some states it may be referred to as a State Transfer Tax.  You will find the fee reflected in your U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT SETTLEMENT STATEMENT received prior to your closing date.

 

 

The fee is usually assessed at the rate of certain amount of cents for each $100 of the full purchase price.  In some states, the fee is assessed at the rate of certain amount of cents for each $500.  It makes no difference whether the purchase is all cash, all financed, or some combination of cash and financing because this tax is based on the purchase price. For example, the fee in Florida is assessed at $.70 for each $100 of the full purchase price.  In Florida the State Documentary Stamp fee is paid by the seller. This is a one-time tax and is not paid annually. It is part of itemized closing costs.

A majority of states and the District of Columbia provide for this tax but 13 states do not.

The state statutes may or may not stipulate who (buyer or seller) is responsible for paying
the tax. In addition, most statutes list a number of cases where the transfer is exempt
from taxation.