Did converting cooperative apartments to condominium units trigger additional documentary stamp tax on the deeds?

Plain-English summary

A cooperative apartment corporation planned to convert 26 units to condominium ownership. Each tenant-stockholder would return cooperative shares and receive title to the same unit that person already occupied.

Florida found that documentary stamp tax had already been paid when the shareholders acquired their cooperative occupancy rights. The conversion conveyed legal title, but it did not change who owned the relevant right or which unit each person occupied, and the deeds had no consideration.

The deeds for the condominium units therefore were not subject to additional documentary stamp tax.

What this means for you

A change in the legal form of ownership does not necessarily create additional deed tax. On these facts, continuity of ownership, the same occupied units, prior tax on the cooperative rights, and no consideration controlled the result.

Common questions

Was there still a conveyance of title? Yes, but Florida found no consideration and therefore no basis for the tax.

Why did prior tax matter? Documentary stamp tax had already been paid on each shareholder's right to occupy the cooperative unit.

Did residents receive different units? No. Each person continued to occupy the same unit after the conversion.

Citations and references

• Fla. Stat. § 201.02(2)-(3) (tax on cooperative occupancy rights and evidence of ownership)
• Fla. Stat. § 719.103(12) (cooperative apartment corporation)
• Fla. Stat. ch. 718 (condominiums)
• Fla. Admin. Code r. 12B-4.013(11)-(12) (cooperative and condominium units)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 06B4-006

Original ruling text

SUMMARY
QUESTION: Is the conversion from a Cooperative to a Condominium subject to documentary stamp tax?
ANSWER - Based on Facts Below: Where there is to be no change of ownership from the right previously given to
the tenant-stockholders, and each party will still occupy the same unit as is currently occupied, there is a conveyance
of title, but there is no consideration and, therefore, no basis for the imposition of tax. The documentary stamp tax has
already been paid on this right to occupy these units, and no additional documentary stamp tax will be due on the
change from a Cooperative form of ownership to a Condominium form of ownership.

August 8, 2006

Re: Technical Assistance Advisement No. 06B4-006
Documentary Stamp Tax - Conversion from Cooperative to Condominium
Sections 201.02, 719.103(12), F.S.
Chapter 718, F.S.
Rule 12B-4.013 (11), (12), F.A.C.
XXX (hereinafter, Cooperative)
XXX (hereinafter, Condominium)
Dear:
This is in response to your request for a technical assistance advisement asking for an opinion on whether the
deeds conveying the units of a cooperative to the current owners in a condominium form of ownership are subject to
documentary stamp tax.
FACTS AS PRESENTED BY PETITIONER
A Florida corporation is owned by twenty-six tenant-shareholders. The corporation is a cooperative apartment
corporation (Cooperative), as defined in s. 719.103(12), F.S., which owns the real property involved. The shareholders
owning the stock in the corporation possess the exclusive right to occupy the 26 residential apartment units by virtue
of proprietary leases from the Cooperative. These shareholders paid documentary stamp tax on these articles of
ownership at the time they first occupied the cooperative units. These shareholders now seek to convert these units to
a condominium.
The Cooperative wishes to declare a condominium form of ownership by recording a Declaration of Condominium
under Chapter 718, F.S. By virtue of a deed, the Corporation will actually pass title to the individual Condominium unit
to the same tenant-stockholder who currently occupies that unit, in exchange for the return of the shares of stock in
the Cooperative now held by that individual.

REQUESTED RULING
You request the Department's determination that the deeds involved in this request are not subject to documentary
stamp tax.
LAW AND DISCUSSION
Documentary stamp tax has already been paid on the right to occupy the cooperative apartments. Section 201.02,
F.S., provides in pertinent part:
(2) The [documentary stamp] tax imposed...shall also be payable upon documents by which the right is granted to a
tenant-stockholder to occupy an apartment in a building owned by a cooperative apartment corporation or in a
dwelling on real property owned by any other form of cooperative association as defined in s. 719.103.
(3) The tax imposed by subsection (2) shall be paid by the purchaser, and the document recorded in the office of the
clerk of the circuit court as evidence of ownership....
Also, under Rule 12B-4.013, F.S
(11) Cooperative Units: Instruments by which the right is granted to a tenant-stockholder to occupy a unit owned by a
cooperative corporation are subject to tax....
(12) Condominium Units: Instruments conveying interest or ownership in a condominium unit are subject to tax.
Since there is to be no change of ownership from the right previously given to the tenant-stockholders, and each
party will still occupy the same unit as is currently occupied, there is a conveyance of title, but there is no
consideration and, therefore, no basis for the imposition of tax. The documentary stamp tax has already been paid on
this right to occupy these units, and no additional documentary stamp tax will be due on the change of the unit from a
Cooperative form of ownership to a Condominium form of ownership.
DETERMINATION
Therefore, the deeds to be recorded for each of these Condominium units are not subject to documentary stamp
tax under s. 201.02, F.S.
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 backup documents are public records under
Chapter 119, F.S., and are subject to disclosure to the public under the conditions of s. 213.22, F.S. Confidential

information must be deleted before public disclosure. In an effort to protect confidentiality, we request you provide the
undersigned with an edited copy of your request for Technical Assistance Advisement, the backup material and this
response, deleting names, addresses and any other details which might lead to identification of the taxpayer. Your
response should be received by the Department within 15 days of the date of this letter.
Sincerely,
M. E. Clemens, C.P.A.
Senior Tax Specialist
Technical Assistance and Dispute Resolution
MEC/mh
Record ID: 21330