If there is no mortgage when the property is being transferred between spouses, or if the property is being transferred as a result of a divorce, transfer taxes are generally not due. With such transfers, if the property is mortgaged, then tax is generally due on half of the outstanding balance. In fact, taxes may be due on a quit claim deed even when the property is transferred between spouses. § 201.02(1)(a) While there are a few exceptions, most transfers will result in either party owing transfer taxes calculated on the amount of any outstanding mortgage or the fair market value of the property at the time of transfer. Florida Transfer Taxes (aka Documentary Stamp Taxes) – Transferring property triggers the assessment of Florida Transfer See Fla.To learn more about the different types of title insurance policies, review our Title Insurance Primer
However, transferring property to another owner, or even adding subsequent owners, may negatively affect or void an Owner’s Title Insurance Policy. Transferees may be comfortable accepting ownership of property from family members via a quitclaim deed knowing that a title insurance policy was once issued subsequent to a comprehensive title search. Title Insurance Policy Cancellation – Title insurance provides current owners with invaluable protection from prior encumbrances, liens, and unresolved permitting issues.Property Tax Assessment – A transfer via quit claim deed may also lead to a reassessment of property taxes resulting in an increased amount owed each year based on an increased property value.
It may also be affected by whether the transferee resides in the subject property. However, transferring property via a quit claim deed without first knowing which of the current homeowners qualify for the exemption may lead to the exemption being lost entirely or significantly reduced as a result of the transfer.
The following is a list of considerations to discuss with your attorney prior to executing quit claim deeds in Florida:
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