Florida Closing Costs, Explained: Doc Stamps, Title and Tax Prorations

The short answer

Florida closing costs come from a few predictable places: state documentary stamp taxes, title insurance and settlement fees, property tax prorations, lender charges, and prepaid insurance and escrow. Who pays what is set by your contract and local custom, so read your closing estimate line by line and ask about anything you don't recognize.

Nobody likes surprises at the closing table. Most of them disappear once you know what each line is for.

What are Florida's documentary stamp taxes?

Florida charges an excise tax on documents that transfer real estate and on loan documents. You'll see three items:

• Doc stamps on the deed: 70 cents per $100 of the sale price in every Florida county except Miami-Dade. In Northeast Florida, the seller customarily pays this, though the contract controls.
• Doc stamps on the mortgage note: 35 cents per $100 of the loan amount, paid by the borrower.
• Intangible tax on the mortgage: 0.2 percent of the loan amount, also paid by the borrower.

A simple illustration. On a $400,000 sale with a $320,000 loan, the math works out like this:

• Deed doc stamps: $400,000 ÷ 100 × $0.70 = $2,800
• Note doc stamps: $320,000 ÷ 100 × $0.35 = $1,120
• Intangible tax: $320,000 × 0.002 = $640

Those figures are an example of how the formulas work, not a quote. Your title company calculates the exact amounts.

How does title insurance work in Florida?

There are usually two policies:

• The lender's policy protects your lender and is required with most loans.
• The owner's policy protects you against covered title problems for as long as you own the home.

Florida sets title insurance premium rates by regulation, so the premium itself doesn't change from one title company to the next. Settlement and closing fees can. Who pays for the owner's policy is a matter of local custom and negotiation, so settle it in the contract.

Why do property taxes get split at closing?

Florida property taxes are paid in arrears. Bills go out around November 1 for the current calendar year, with a discount for paying early: 4 percent in November, stepping down to 1 percent in February. The full amount is due by March 31 of the following year.

That means at a typical closing, the seller hasn't yet paid the current year's taxes. The title company prorates them: the seller credits the buyer for the days the seller owned the home, and the buyer pays the full bill when it arrives.

If you buy in the late fall, ask whether the current year's bill has already been issued or paid. It changes how the proration looks.

What other costs should buyers expect?

• Lender charges: origination, appraisal, credit report and similar fees.
• Prepaids and escrow: your first year of homeowners insurance (and flood and wind, if separate) is commonly paid up front, plus a starting balance for your tax and insurance escrow account.
• Inspections and survey: home inspection, wind mitigation and four-point reports, a wood-destroying organism inspection, and a survey if your lender or title company needs one.
• Recording fees for the deed and mortgage.
• Your agent's compensation: buyers now sign a written agreement with their agent before touring homes, and that agreement spells out how the agent is paid. It's negotiable, and sometimes a seller agrees to contribute.

What other costs should sellers expect?

• Deed doc stamps, as above.
• Listing brokerage compensation, per your listing agreement.
• Your share of prorated property taxes.
• Payoff of your existing mortgage.
• HOA or condo estoppel letters, which confirm dues, assessments and any balance owed. These carry a fee.
• Any repair credits or closing cost contributions you agree to in the contract.

When will I see the final numbers?

Buyers using a mortgage receive a Closing Disclosure at least three business days before closing. Compare it to your Loan Estimate. If something moved, ask why.

Sellers receive a settlement statement from the title company. Read it before closing day, not at the table.

One warning I give every client

Wire fraud targets real estate closings. Criminals send convincing emails with "updated" wiring instructions. Before you wire a dollar, call your title company at a phone number you looked up yourself, not one from an email, and confirm the instructions by voice.

Frequently asked questions

Can closing costs be negotiated?

Some can. Who pays certain items, seller contributions toward buyer costs, and some settlement fees are all fair topics during negotiation.

Are closing costs higher in one First Coast county than another?

The state doc stamp rates are the same across Duval, St. Johns, Clay, Nassau and Baker counties. Property taxes, HOA fees and insurance vary by property, so total costs differ home to home.

Do I pay doc stamps if I pay cash?

A cash buyer has no mortgage, so there are no note doc stamps or intangible tax. Deed doc stamps still apply to the sale.