Intangible Tax on a Mortgage

by Mallory Malesky

Aside from the down payment, other costs are associated with taking out a mortgage loan to buy a home. Intangible tax on a mortgage refers to a type of transfer tax collected by some states. The cost is typically included in the closing costs and is based on the loan amount stated on the promissory note. However, the rates and collection procedures vary by state.

Florida

In Florida, the mortgage tax rate is set at 0.55 percent of the loan amount, as of publication. This is broken down into 0.35 percent for documentary tax stamps and 0.2 percent for the intangible taxes. To calculate what you'll owe if you purchase a property in Florida, simply multiply your loan amount by 0.0055. A Florida state law passed in 2007 eliminated intangible taxes on personal property such as unsecured notes, however secured notes such as mortgage loans were not included in the bill. The total tax amount is due at the time the security instrument is presented to the clerk to be recorded.

Georgia

The state of Georgia's intangible tax rate is set at $1.50 per $500 of the total loan amount. If you took out a loan for $250,000 the intangible tax owed equals $750. However, state law limits the maximum amount that can be collected to $25,000. That amount in tax is equivalent to a loan worth over $8.3 million. In most Georgia counties, the clerk of the circuit court collects the tax payment when the security instrument is recorded. In low population counties, the tax commissioner is responsible for collection.

Kansas

Intangible taxes in Kansas are imposed on mortgage loans, as well as savings accounts, stocks and bonds. The structure of the tax rate in Kansas is different than Florida and Georgia. The individual counties and some townships or cities have their own specific tax rate. To determine how much you'll owe, Form 200 must be completed and returned to the county clerk. The clerk computes the bill and the county treasurer sends a bill.

Other States

Most states impose some type of transfer tax or recording tax for mortgage loans. Different states have various names and methods of calculating and collecting. The taxes are generally collected as part of your closing costs, however in some areas the seller might be willing to pay a portion of the tax.

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