Under Section 201.02 and 201.031 of the Florida Statutes, certain counties are authorized to levy a surtax on documents that transfer interest in Florida real property. Transfers of interest in single-family residences are exempt from this documentary surtax.
In 1984, Miami-Dade County exercised this authority, established a Housing Assistance Loan Trust Fund and implemented the Documentary Surtax Program ("Surtax Program"). This program benefits very low- to moderate-income families. Very low-income families have incomes of 50 percent or less than the median area income. Low-income families are those households with incomes of 80 percent or less of median area income. Moderate-income families have incomes greater than 80 percent, but less than 140 percent of the median area income.
Since its inception, the Surtax Program has improved the quality of life for Miami-Dade County families. To date, the Surtax Program has provided:
7,128 low-to-medium income families with low-interest second mortgages, allowing them to become first-time homeowners
Homebuyer counseling, which has kept the mortgage default rate to less than 1.1 percent among Surtax Program participants
Low-cost construction financing that has allowed the County to partner with not-for-profit and for-profit affordable housing developers to produce over 15,000 affordable multi-family rental units.
At least 50% of Surtax funds have benefitted low-income families
Statutory authority to levy this surtax is subject to sunset in 2011, eliminating the County's primary source of funds to address the affordable housing needs of its residents. In light of dwindling resources for the production of affordable housing, the need to renew counties' authority to levy a local documentary surtax for affordable housing cannot be overstated
If the Surtax is allowed to sunset, the tax on residential sales would increase more than 16%. Without the Surtax program, under which residential sales in Miami-Dade County are taxed at 60 cents per $100 of value, the County would revert to the state's residential standard of 70 cents.
Sunset of the Surtax Program will detrimentally impact all families who purchase single-family homes in Miami-Dade County.
Miami-Dade County urges the State Legislature to address the 2005 Florida Supreme Court case of Crescent Miami Center, LLC v. Department of Revenue, in which the court held that transfer of real property from a grantor to a wholly owned grantee is not subject to documentary stamp taxation. This decision opens the door to real estate transactions designed to avoid payment of documentary stamp taxes through the use of artificial legal entities.
During the 2008 legislative session, a proposed bill to address the Crescent Miami decision was determined to have an estimated positive annualized impact of $50.2 million.
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