A lady bird deed (aka enhanced life estate deed) is an instrument used in Florida and a select few other states that enables property to transfer at the death of a grantor (the person that transfers the property) to a grantee (the person receiving the property upon the grantor’s death).
Documentary stamp tax is a tax levied by the State of Florida on transfers of real estate when the transfer involves consideration or if there is a mortgage on the property. For instance, if you transfer your property encumbered by a $100,000 mortgage, then you will need to pay a documentary stamp tax on the sale that is based on the $100,000 mortgage. In all counties, except Miami-Dade, the documentary stamp cost is $0.70 for every $100 of the amount of the mortgage. In Miami-Dade, the cost is $0.60 for every $100 for residential property and there is an additional $0.45 for every $100 for non-residential property.
Is a lady bird deed subject to documentary stamp tax? No. The reason is because there is no immediate transfer of the property. The grantor retains full rights and ownership of the property for the grantor’s life (a life estate). The transfer occurs when the grantor passes away. There will be no documentary stamp tax when a beneficiary inherits from a lady bird deed.