Doc Stamp Confusion Holds Up Short Sale Closings In Florida

In Florida, The Tampa Tribune reports:

• As Florida's coffers shrink in the face of a dour economy, confusion over a tax statute threatens to choke the flow of home sales at a time when the state is struggling under the burden of millions of unsold properties.

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• In typical transactions, the law is clear about paying taxes [aka documentary, or "doc" stamps] on the price of the property, but as lenders agree to more short sales - allowing troubled owners to sell homes for less than the mortgage and writing off the rest - there's disagreement over how much tax to charge. Some say the tax should be charged on the lower price, a practice that is standard across the state.

• Others wonder whether the tax should be based on the amount of the mortgage. Although the difference may add up to only about $300 on a typical short-sale transaction, multiply that by hundreds of thousands of properties across the state and the impact is substantial.

For more, see Tax 'Mess' Muddles Short Sales Of Homes.