Effective July 1, 2009, new Florida Statute Section 201.02 provides eliminates a “loop hole” that previously allowed sellers of property to transfer an interest in an entity, instead of the real property itself, to avoid paying Florida’s documentary stamp tax. Under prior law, documentary stamp tax was only levied on a transfer of a deed. The new law will impose the documentary stamp tax on the transfer of an interest in a “conduit entity” if the underlying real property was transferred to the conduit entity within 3 years of the conveyance of the interest in the conduit entity to a third party.

However, for estate planning purposes, the new law makes it clear that a gift of an ownership interest in a conduit entity is not subject to tax. In addition, the transfer for estate planning purposes by a natural person of an interest in a conduit entity to an irrevocable grantor trust will not be subject to tax.

Please contact us if you need assistance in better understanding the new documentary stamp tax law, its filing requirements and exceptions thereto.

(Updated December 2009)