Is documentary stamp tax due when a developer deeds Florida property to a land trust but remains its sole beneficial owner?

Plain-English summary

The Florida Department of Revenue concluded that no documentary stamp tax was due when a developer deeded wholly owned Florida property to the trustee of a Florida land trust while immediately retaining every beneficial interest.

The proposed trust would initially hold condominium units and other property intended for a multisite timeshare plan. Until a notice granted access rights to beneficiaries, the developer alone retained all rights, benefits, carrying-cost obligations, and rights to use or occupy the property.

The result applied whether the transferred property was encumbered or unencumbered, but only while no other party obtained any interest or beneficial interest. A later grant of beneficiary access rights was outside this no-change-in-ownership conclusion.

What this means for you

Land-trust and timeshare developers

Document who holds beneficial ownership immediately after each deed. Trustee title alone did not trigger tax here because economic ownership stayed entirely with the developer.

Transaction teams

Reassess the tax consequences when use, occupancy, or other beneficial rights later pass to another party.

Common questions

Q: Did a mortgage or other encumbrance change this specific conclusion?
A: No, under the cited trust rule, because the developer remained the sole beneficiary.

Q: Could another beneficiary receive use rights without affecting the analysis?
A: No. The Department's position required that no other party receive any interest, including a right to use or occupy the property.

Citations and references

• Fla. Stat. §§ 201.02(1)(a) and (4), 689.071, and 213.22
• Fla. Admin. Code r. 12B-4.013(28)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 13B4-005

Original ruling text

Executive Director
Marshall Stranburg

QUESTION: Is documentary stamp tax due on a deed that transfers a 100 percent beneficial interest in
Florida real property from a grantor to a Chapter 689, F.S., trust if, after the transfer, the grantor still has a
100 percent beneficial interest in the transferred property?
ANSWER: No documentary stamp tax is due on a deed that transfers Florida real property from a grantor
to a Chapter 689, F.S., trust if, after the transfer, the grantor still has a 100 percent beneficial interest in the
transferred property.
December 10, 2013

XXX
XXX
XXX

Re:

Technical Assistance Advisement No. 13B4-005
Documentary Stamp Tax - Transfers of real property from Developer to Trustee of Land Trust
Sections 201.02(l)(a), 201.02(4), 689.071, 721.05(34), 721.05(39), 721.08(2)(c)4., Florida Statutes
(F.S.)
Rule 12B-4.013(28), Florida Administrative Code (F.A.C.)
XXX (Developer)
XXX (Trust)

Dear XXX:
This is in response to your request dated XXX, for a Technical Assistance Advisement (TAA) pursuant to
s. 213.22, F.S., and Rule 12-11, F.A.C., regarding whether documentary stamp tax is due on deeds that
transfer Florida real property to a trust. An examination of your letter has established that you have
complied with the statutory and regulatory requirements for issuance of a TAA. Therefore, the
Department is hereby granting your request for a TAA.
FACTS PRESENTED BY PRACTITIONER
The Developer will establish the Trust, a Florida land trust, pursuant to s. 689.071, F.S., by executing a
trust agreement (“Agreement”) setting forth the terms of the Trust. The Developer will transfer title to
whole condominium units and other real property interests (“Trust Property”) to the trustee (“Trustee”) of
the Trust for no consideration, and will record a deed in the public records of the county where the Trust
Property is located. Initially, the Trust Property will be comprised of real property interests located in one
or more counties in Florida; however, other real property interests located within or without Florida may
be added to the Trust in the future.
Child Support Enforcement – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – James McAdams, Director  Information Services – Damu Kuttikrishnan, Director

www.myflorida.com/dor
Tallahassee, Florida 32399-0100

Technical Assistance Advisement 13B4-005
Page 2

The Developer intends to create and subject the Trust Property to a multisite timeshare plan (“Timeshare
Plan”) that will be registered with the Florida Department of Business and Professional Regulation. With
respect to a particular real property interest, “Developer Property” is Trust Property for which a Notice of
Beneficiary Access Rights (“Notice”) has not been delivered to the owners of a beneficial interest in the
Trust (“Beneficiaries”). Until the Notice is delivered, all rights and benefits, as well as the responsibility
for all carrying costs associated with such real property, will belong to the Developer.
The Developer will record a Memorandum of Trust Agreement (“Memorandum”) in the public records of
a selected domicile county for the Trust (“Domicile County”), evidencing the existence and certain aspects
of the Agreement. Per the provisions of the Agreement, and in accordance with the deeds to be recorded
from time to time and any other instruments of conveyance recorded in the public records, all beneficial
ownership in all property transferred to the Trustee will immediately and automatically vest with the
Developer as Developer Property. Therefore, the Developer will initially be the sole and exclusive owner
of all beneficial interests in all Trust Property related to such Developer Property. Until the time (if ever)
a Notice is delivered to the Beneficiaries regarding such Developer Property (which will then make such
property subject to the Timeshare Plan), all beneficial rights, obligations, and other indicia of ownership
of the Developer Property will remain with the Developer, and may not be used by the Beneficiaries
(other than the Developer).
Pursuant to the same procedure set forth above, real property will be transferred by the Developer to the
Trustee from time to time (to be included as part of the Trust Property), by delivering a deed of
conveyance to the Trustee, which will be recorded in the public records where the Trust Property is
located. For purposes of this TAA, the Developer will be the grantor of all Trust Property transferred to
the Trustee.
The documents presented for examination are as follows:

1. Proposed XXX Agreement
2. Proposed Memorandum of Trust
3. Notice of Beneficiary Access Rights
   REQUESTED RULING
   You requested that the Department confirm that if the Developer transfers wholly owned Trust Property
   (either encumbered or unencumbered) to the Trustee of the Trust for no consideration, and the Developer
   is immediately and automatically vested with all beneficial interest in such Trust Property, then no
   documentary stamp tax is due because no transfer of beneficial interest in the trust property resulted from
   the transfer.
   LAW AND DISCUSSION
   Section 201.02(1)(a), F.S., imposes documentary stamp tax on deeds, instruments, or writings whereby
   any lands, tenements, or other real property, or any interest therein, shall be granted, assigned, transferred,

Technical Assistance Advisement 13B4-005
Page 3

or otherwise transferred to, or vested in, the purchaser or any other person by his or her direction. The tax
rate is 70 cents on each $100 of the consideration or portion thereof, for the property interest transferred.
For purposes of this section, consideration includes, but is not limited to, the money paid or agreed to be
paid; the discharge of an obligation and the amount of any mortgage, purchase money mortgage lien, or
other encumbrance, whether or not the underlying indebtedness is assumed. Where property other than
money is exchanged for interests in real property, there is the presumption that the consideration is equal
to the fair market value of the real property interest being transferred.
Section 201.02(4), F.S., states that the tax imposed by subsection (1) shall also be payable upon
documents which convey or transfer, pursuant to s. 689.071, F.S., any beneficial interest in lands,
tenements, or other real property, or any interest therein, even though such interest may be designated as
personal property, notwithstanding the provisions of s. 689.071(6), F.S. The tax shall be paid upon the
execution of any such document.
Rule 12B-4.013, F.A.C., provides the following, in part:
(28) Trusts Pursuant to Chapter 689, F.S.: A deed to or from a trustee conveying real
property is taxable to the extent that the deed transfers the beneficial ownership of the real
property and to the extent that there is consideration for the transfer. The following are
examples of taxable and exempt conveyances to or from a trustee.
(a) No change in Beneficial Ownership: A deed from X to a trustee is exempt from the
stamp tax to the extent of X's beneficial ownership interest as a trust beneficiary, whether
or not the real property is encumbered by a mortgage. For example, if X owns encumbered
or unencumbered real property and conveys it to the trustee of a trust of which X is the sole
beneficiary, the conveyance is exempt from the stamp tax.
DEPARTMENT’S POSITION
As to the requested advisement, no documentary stamp tax is due on any instrument that transfers Florida
real property wholly owned by the Developer to the Trustee of the Trust, as long as no party other than the
Developer, following the transfer, has any interest or beneficial interest in the property transferred,
including, but not limited to, the right to use or occupy the property.
This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is binding on
the Department only under the facts and circumstances described in the request for this advice as specified
in s. 213.22, F.S. Our response is predicated on those facts and the specific situation summarized above.
You are advised that subsequent statutory or administrative rule changes, or judicial interpretations of the
statutes or rules, upon which this advice is based, may subject similar future transactions to a different
treatment than expressed in this response.
You are further advised that this response, your request and related documents are public records under
Chapter 119, F.S., which are subject to disclosure to the public under the conditions of s. 213.22, F.S.
Your name, address, and any other details, which might lead to identification of the taxpayer, must be

Technical Assistance Advisement 13B4-005
Page 4

deleted before disclosure. In an effort to protect the confidentiality of such information, we request you
provide the undersigned with an edited copy of your request for Technical Assistance Advisement, backup
material and response within fifteen days of the date of this advisement.

Sincerely,

Henry Small
Tax Law Specialist
Technical Assistance and Dispute Resolution
HJS/tlf
Record ID: 150074