Florida Real Estate Broker ExaminationReal Estate CalculationsMedium
A buyer is obtaining a new mortgage for $300,000. In Florida, the documentary stamp tax on the note is $0.0035 per dollar of the face value. How much will the buyer pay in documentary stamp tax on the mortgage note?
- A$2,100.00
- B$1,200.00
- C$900.00
- D$1,050.00
Show answer & explanationAnswer & explanation
Correct answer: D. $1,050.00
The documentary stamp tax on the note is calculated by multiplying the mortgage amount by the tax rate. So, $300,000 * $0.0035 = $1,050.
Why the other options are wrong
- A. This is incorrect; it may result from miscalculation or using a wrong rate.
- B. This would be if the rate was $0.0040 per dollar.
- C. This would be if the rate was $0.0030 per dollar.
Doc Stamp Tax on Note (FL)
In Florida, the documentary stamp tax on the note is a state tax levied on the promissory note associated with a mortgage, typically paid by the borrower at closing.
- Rate: $0.0035 per dollar of the face value of the note.
- Applies to new mortgages and some assumptions.
- A closing cost for the buyer/borrower.
Memory trick: Note tax is a small fraction, for every dollar's action!