The Quick Read: Yes, in the usual case. Florida’s documentary stamp tax on a mortgage is charged on the full amount the new mortgage secures, not only on the cash you take out. An FHA cash-out refinance is a new loan that pays off the old one, so the payoff, the cash, and any financed premium and costs all sit inside the taxed amount. The cash-out is the smaller part of the base.
Is the Tax on the Whole Loan or Just the Cash-Out?
The tax follows the whole recorded mortgage. The Florida Department of Revenue says mortgages are taxed on the full indebtedness they secure, and that there is no cap on a recorded mortgage. The rate is set in Section 201.08 of the Florida Statutes at 35 cents per $100 of the debt, or fraction of $100.
An FHA cash-out refinance is not a loan on top of your old loan. It replaces it. The new note and mortgage must cover:
- The payoff of the existing mortgage
- The cash you take at closing
- The upfront mortgage insurance premium, when it is financed
- Closing costs, when they are rolled in
The taxed base is the total of those pieces. This is the practical reading of the state rule applied to how a cash-out is built. No single agency page spells it out for FHA, so a title agent should confirm the final figure on your file.
Here is the catch for planning. A small cash-out on a large existing balance still produces a large tax, because the old payoff is part of the base. Judge the tax by the total loan size, not by the check you receive.
Why Is the Tax Base So Large on an FHA Cash-Out?
FHA requires a new insured first-lien mortgage. Across the wholesale programs Lendmire works with, the FHA cash-out reaches 80% LTV on a home you have owned and occupied for 12 months before the case number is assigned. That 80% ceiling is on the loan balance, so the loan can be large even when the cash is modest.
HUD cut the cash-out ceiling from 85% to 80%, effective for case numbers assigned on or after September 1, 2019, per HUD’s announcement. Anything that comes out of the loan proceeds, including state taxes and a financed premium, uses room under that same ceiling. A larger tax means a little less cash at the same home value.
The upfront premium is 1.75% of the base loan, and borrowers commonly finance it. HUD’s premium appendix lists the upfront premium on all FHA mortgages. That appendix is older, so treat it as background. The program figure in the network’s guidelines governs your file, subject to lender guidelines and full file review. A financed premium raises the recorded mortgage, which raises the tax base.
For the program basics, Lendmire’s FHA cash-out refinance program page covers who the loan fits and how the equity limit works.
Which Parts of the New Loan Get Taxed?
| Loan component | Inside the taxed base? | Note |
|---|---|---|
| Payoff of old mortgage | Yes | Part of the new debt |
| Cash to you | Yes | New money |
| Financed upfront premium | Yes | Raises the balance |
| Closing costs rolled in | Yes | Raises the balance |
| Costs you pay out of pocket | No | Never in the loan |
The last row matters. Anything you pay in cash at closing stays out of the recorded mortgage. Paying it in cash lowers the loan and the tax slightly, but it also lowers the cash you walk away with.
A Worked Example Without Dollars
Say a home appraises at a value where 80% LTV applies, and the old loan balance is about 60% of value. The cash-out room is the gap between those two figures, less the financed premium and costs. The new mortgage is the full 80% of value. The tax is 35 cents per $100 on that entire 80% figure, rounded up for any fraction of $100. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Now compare it to a reader’s common assumption. If you believed the tax applied only to the cash-out slice, you would be taxing roughly a quarter of the actual base. The real base is about four times that. Plan for the larger one.
Who Pays, and Is It a Lender Fee?
It is a state tax, not a lender fee, and you cannot negotiate it down. The closing or title agent collects it and pays it when the mortgage is recorded. Because it is paid from the transaction, it either reduces your net cash or, if financed, adds to your balance.
A second state tax exists. The nonrecurring intangible tax is 2 mills, meaning the secured amount times 0.002, and it applies to the extent Florida real property secures the debt. The lender is the legal taxpayer, but it may pass the cost to the borrower. Doc stamps fall under Chapter 201 and the intangible tax under Chapter 199. They are two taxes, not two names for one.
Because this is a consumer mortgage, you receive a Loan Estimate and a Closing Disclosure. Ask your loan officer to show where the state taxes sit on each, and have the title agent confirm the math before closing.
If the mortgage is not recorded in a timely manner, the intangible tax goes straight to the Department of Revenue. Unpaid tax creates enforcement problems later, so do not treat it as optional.
Can Any of It Be Avoided?
Rarely on a true cash-out. The Department of Revenue lists changes that do not trigger a new tax, including fixing errors, changing guarantors, and substituting a new mortgagee. New money on a new note is not on that list. Section 201.09 exempts certain renewals, but that exemption is narrow and is not built for a cash-out refinance.
Do not let anyone tell you the tax disappears if the deal is called a “modification.” FHA requires a new insured first-lien mortgage. Florida courts have also been split on whether a note or mortgage can be enforced before the tax is paid, which is another reason to pay it at closing.
A few more edge cases:
- The $2,450 cap. It applies to unsecured or unrecorded notes. A recorded mortgage has no cap.
- Note signed outside Florida. If Florida real property secures it, the taxes are due when the mortgage is recorded here.
- Reverse mortgages. Only the principal limit is taxed, but that is a different product from an FHA forward cash-out.
- Federal exemption. The statute exempts certain federally guaranteed loans only where federal rules bar the tax against the borrower. Do not assume that exemption covers FHA mortgages; confirm with the title company or closing agent.
- Both note and mortgage. The tax is paid once, on the mortgage, so you are not taxed twice on the same debt.
FHA Cash-Out vs. Other Ways to Pull Equity
| Option | Taxed base | Leverage note |
|---|---|---|
| FHA cash-out | Entire new mortgage | Up to 80% LTV |
| FHA rate-and-term | Entire new mortgage, smaller | Up to 97.75% on a principal residence occupied 12 months |
| Second lien or HELOC | Amount the new lien secures | Existing loan stays |
A second lien keeps your first loan in place, and the new lien carries its own tax on what it secures. A HELOC is taxed on the full line when recorded. So the comparison is not “taxed versus untaxed.” It is which base is smaller for the amount you need, set against what you give up by replacing the first loan. The right answer depends on the loan you already hold, so compare both on paper.
What Does This Do to Your Break-Even?
Treat the state taxes as a fixed cost of the new loan. If you finance them, the balance grows, and so does the monthly obligation, though this article does not quote payments. If you pay them in cash, you protect the balance but reduce your cash on hand.
Ask three questions before you proceed:
1. How much of the new loan is old payoff versus new cash?
2. Does the cash you need justify taxing the whole balance?
3. Would a second lien reach the same cash with a smaller taxed base?
If the cash need is small and your current loan is in good shape, a second lien may fit better. If you need to replace the first loan anyway, the FHA cash-out folds everything into one note.
Key Terms Defined
Documentary stamp tax: A Florida state tax on notes and mortgages, based on the debt amount.
Nonrecurring intangible tax: A separate state tax of 2 mills on the secured amount, paid once at recording.
Note: Your written promise to repay the loan.
Mortgage: The recorded document that makes the property security for the note.
Cash-out refinance: A new loan that pays off the old one and gives you equity as cash.
Renewal exemption: A narrow rule that excuses tax on some true renewals of existing debt.
Common Misreadings
- “I only pay on the cash I take out.” The base is the full debt secured.
- “The tax is capped at $2,450.” That cap is for notes, not recorded mortgages.
- “It’s a lender fee.” It is a state tax.
- “It’s based on my home’s value.” It is based on the loan amount.
- “I can get it refunded if I don’t use the cash.” There is generally no refund route for an ordinary recorded mortgage. Confirm with the Department of Revenue.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Frequently Asked Questions
Do I pay doc stamps again when I refinance with an FHA cash-out?
Usually yes. A cash-out is a new note and mortgage, and the tax applies to the new recorded mortgage. The narrow renewal exemption is not designed for a loan that adds new money.
Is the intangible tax the same as doc stamps?
No. They are two separate state taxes. Doc stamps are 35 cents per $100 of the debt. The intangible tax is 2 mills on the secured amount, and the lender may pass it to you.
Does financing the upfront premium raise the tax?
Yes. A financed premium becomes part of the loan balance the mortgage secures, so it is part of the taxed base. It also uses room under the 80% LTV ceiling. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Is there a cap on the tax for a mortgage?
No. The $2,450 cap applies to notes that are unsecured or unrecorded. A recorded mortgage is taxed on the full amount it secures.
Who collects the tax at closing?
The title or closing agent collects it and pays it at recording. It is a government charge, so you cannot negotiate it, and you should have the agent confirm the math before you sign.
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches. Quotes are available through the mortgage quote page or at 828-256-2183, subject to lender guidelines and full file review. Nothing here is a commitment to lend.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and home buyers in 16 states with FHA, VA, conventional and jumbo purchase and refinance loans arranged through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and the agency guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
For the program’s current guidelines, see FHA loan programs.
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References
1. Florida Department of Revenue – Documentary Stamp Tax
2. Florida Senate – Florida Statutes Section 201.08
3. HUD Archives – Cash-Out Refinance LTV Announcement
4. HUD – Mortgage Insurance Premiums Appendix
5. Florida Department of Revenue – Nonrecurring Intangible Tax
This article is part of Lendmire’s FHA Loan series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: FHA Cash-out Refinance Rules: Occupancy, Loan-to-value, And Credit · Conventional Cash-Out vs FHA Cash-Out for a Current FHA Homeowner · FHA Cash-Out Refinance for Homeowners Choosing Between Programs
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.