Was a Florida warranty deed taxable when it transferred only a life estate to the owner's parents and returned the remainder to the grantor?

Plain-English summary

The owner proposed conveying only a life estate in Florida residential property to the owner's parents. The parents would have possession and use during their lives, and the remainder would return to the grantor.

The Department treated the deed as transferring only that time-limited life-estate right. The grantor continued to own fee-simple title subject to the life estate.

Under those facts, the proposed warranty deed was not subject to documentary stamp tax.

What this means for you

The result depended on the deed conveying only a life estate and leaving the underlying fee ownership with the grantor.

Common questions

What did the grantees receive? Possession and use for a period limited by their lives.

Who retained fee-simple ownership? The grantor, subject to the life estate.

Was the proposed deed taxable? No, under the described terms.

Citations and references

• Fla. Stat. § 201.02(1), as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 12B4-001

Original ruling text

Executive Director
Lisa Vickers

TAX: Documentary Stamp Tax
TAA NUMBER: 12B4-001
ISSUE: Transfer of Life Estate Interest in Real Property
STATUTE CITE(S) Section 201.02(1), F.S.
RULE CITE(S):
QUESTION: Will a deed that transfers only a life estate interest in real Florida property be
subject to documentary stamp tax.
ANSWER: The transfer of an interest in property is not taxable if the deed transfers only a life
estate interest, i.e. the right to possess and use the property. In such case, the grantor continues
to own the fee simple title.
March 06, 2012
XXX
XXX
XXX
Re:

Technical Assistance Advisement No. 12B4-001
Documentary Stamp Tax- Life Estate Interest
Section 201.02(1), F.S.
XXX (hereinafter referred to as “Grantor”)
XXX (hereinafter referred to as “Life Tenants”)

Dear XXX:
Your letter dated XXX, requests a Technical Assistance Advisement concerning documentary
stamp tax on life estate interests. This response to your request constitutes a Technical Assistance
Advisement under Chapter 12-11, Florida Administrative Codes, and is issued to you under the
authority of section 213.22, Florida Statutes.
Facts as Presented by Petitioner
The grantor presently owns residential real property located in XXX, Florida. The real property
is encumbered by a mortgage with a current outstanding balance of approximately $XXX. The
property is not the Grantor’s homestead property. The Grantor intends to transfer a “Life Estate
Interest Only” in the property to his parents by Warranty Deed with the remainder interest upon
the death of the Life Tenants going back to the Grantor.
Child Support Enforcement – Ann Coffin, Director z General Tax Administration – Jim Evers, Director
Property Tax Oversight – James McAdams, Director z Information Services – Tony Powell, Director

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

Technical Assistance Advisement 12B4-001
Page 2

Request for Advisement
You request an opinion on whether the deed that would transfer only a life estate interest in real
property would be subject to tax.
Provisions of Law and Discussion
Section 201.02(1), F.S., imposes tax on deeds that convey an interest in Florida real property at
$.70 per $100 or portion thereof of the consideration given or received in exchange for the
property. For purposes of this section, consideration includes but is not limited to: money paid
or to be paid and the amount of any mortgage or other encumbrance on the property conveyed,
whether or not the underlying indebtedness is assumed. When property other than money is given
for the conveyance, the consideration is presumed to be equal to the fair market value of the property
conveyed.
Florida law imposes tax on deeds that transfer an interest in Florida real property. It is the
Department’s position that the transfer of an interest in property is not taxable if the deed
transfers only a life estate interest, i.e., the right to possess and use the property for a time limited
by the life of the grantee. In such case, the grantor continues to own the fee simple title subject
to the life estate.
Position of the Department
The proposed warranty deed provided for review will transfer only a life estate interest and
therefore will not be subject to documentary stamp tax.
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,

Technical Assistance Advisement 12B4-001
Page 3

Celestine Turner
Tax Law Specialist
Technical Assistance and Dispute Resolution
CG/tf
Record ID#: 115234