Florida Governor Ron DeSantis signed legislation (House Bill 7073) that amends existing law by basing the state’s documentary stamp tax on the principal limit of a reverse mortgage instead of the maximum claim amount.
What’s next: The law becomes effective July 1, 2024.
Why it matters: Florida seniors have been forced to pay documentary stamp taxes on amounts in excess of what they received under their reverse mortgages.
What they’re saying: “For far too long, Florida reverse mortgage borrowers have been forced to pay documentary stamp taxes on the stated mortgage amount rather than the principal limit. That is why this Bill is so critically important for Florida reverse mortgage borrowers,” said NRMLA in a letter of support to the bill’s sponsors in March.
Disclaimer: Based on input from NRMLA’s outside counsel, the consensus is that the FL bill would apply to both HECMs and proprietary reverse mortgages. The bill uses the term “home equity conversion mortgage,” but it defines it by referencing the definition of a reverse mortgage under Regulation Z (12 CFR 1026.33(a)). The reverse mortgage definition provided in 12 CFR 1026.33(a) applies to both HECMs and proprietary reverse mortgages so it appears that the FL bill would also apply to both HECMs and proprietary reverse mortgages. Additionally, although not binding, the comments made in the bill’s fiscal analysis also imply that the bill should apply to all reverse mortgages, not just FHA-insured HECMs
NRMLA provides content for informational purposes and does not provide compliance advice. Members are advised to check with their own counsel.
