The Quick Read: Usually yes. On a typical DSCR cash-out with a new lender, Florida taxes the entire new loan balance, not just the cash you walk away with. The new note and recorded mortgage replace the old debt, so the whole new principal is the tax base. The narrow exception is a same-lender renewal, which can shrink the base.
- Doc stamps are 35 cents per $100 of the new mortgage, with no cap on the recorded mortgage.
- A separate one-time intangible tax adds 2 mills per dollar, which is 0.002 times the secured amount.
- Paying off an old loan does not get that payoff portion excluded when a different lender funds the refinance.
- Lenders generally pass both taxes to the borrower on the closing statement.
- Whether any exemption fits your file is a question for a Florida title agent or tax attorney.
What Florida Actually Taxes on a Refinance
Florida taxes the debt your new paperwork creates. It does not tax the cash you receive. On a cash-out refinance, that debt is the full new loan.
DSCR Cash-Out Calculator
Run the cash-out numbers in Florida
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 8, 2026
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The Florida Department of Revenue’s notice on promissory notes puts documentary stamp tax at $0.35 per $100, or fraction thereof, of the indebtedness. It also says the $2,450 ceiling applies to a promissory note but not to a mortgage or lien recorded in Florida. Rule 12B-4.051 says the same, and adds that the tax is paid on the recorded mortgage with a notation made on the note.
Then comes a second tax. The nonrecurring intangible tax is a one-time charge of 2 mills per dollar on obligations secured by Florida real property. Think of it as a second meter running on the same loan balance.
Two taxes. Same base. Both show up at closing.
Why the Payoff Portion Gets Taxed Too
The payoff is taxed because the old loan is gone and a brand-new one exists. Your DSCR lender does not amend the old mortgage. It records a new one and pays off the previous lender with part of the proceeds.
Picture the money flow on a cash-out. The new loan funds, the old lender gets paid, closing costs come out, and the remainder lands in your account. The tax calculation never looks at that split. It looks at one number: the principal on the new note and mortgage.
That is why the headline question trips people up. “Cash-out amount” sounds like the cash you pocket. In Florida’s tax logic, the base is the whole balance, and your take-home slice is only a piece of it.
Across the wholesale network where Lendmire places DSCR files, this is the standard structure. A cash-out refinance on an investment property tops out around 75% LTV (loan-to-value, the loan as a share of the property’s value) on most programs. The new loan sits on a fresh note, so the full balance is taxed.
The Math, Shown Plainly
Run the numbers on a modeled $300,000 new loan. This is an illustration of the formulas, not a quote or a cited market figure.
- Doc stamps: divide the new principal by 100, round up, and multiply by $0.35. That gives 3,000 units times $0.35, or $1,050.
- Intangible tax: multiply the secured amount by 0.002, with no rounding. That gives $600.
- Combined: $1,650 on that balance.
A handy shortcut: every $1,000 of new loan carries about $5.50 in combined state tax. The cost scales straight up with loan size, because the mortgage side has no cap. Lendmire’s piece How Much Florida Doc Stamps Add to a DSCR Cash-Out by Loan Amount walks through that scaling in more detail.
Now the point that matters for your decision. Suppose most of that $300,000 pays off the old loan and only a small slice reaches you as cash. The tax is still $1,650. Measured against the cash you actually receive, the effective tax is far higher than the 35-cent headline suggests. A thin cash-out on a large payoff gets taxed like a big one.
When the Tax Base Can Shrink
The base can shrink in one situation: a qualifying renewal. Under Florida’s renewal rules, tax falls only on the increase in unpaid principal, not the whole balance.
Rule 12B-4.052 says a qualifying renewal is taxed on the amount the unpaid principal increases. Anything that does not qualify is taxed in full. A Florida appellate decision involving a large bank’s refinances pushed in the same direction. The court rejected the state’s novation theory and treated the original obligations as rolled into the new loans. Moffa Tax Law’s summary of that decision reads it as taxing only the new money when principal increases.
Here is the catch. The doc stamp exemption turns on the new loan being a renewal of the old one. The intangible tax exemption turns on refinancing the old loan with the same lender. A DSCR cash-out almost always brings a different lender, so it normally does not fit either test.
| Scenario | Likely tax base |
|---|---|
| New-lender DSCR cash-out | Full new loan |
| New-lender rate-and-term refinance | Full new loan |
| Same-lender qualifying renewal | Increase in principal |
| Deed-only transfer, no new loan | No mortgage tax (deed tax is separate) |
Could a new lender take an assignment of the old note and modify it? In theory. The Florida sources do not describe that as common DSCR practice, and it is not a tactic to plan around. If someone on your team raises it, put it in front of a Florida title agent or attorney before you rely on it.
Does the $2,450 Cap Protect You?
No, not on the mortgage. The cap applies to the note. Because a DSCR loan is secured by a recorded Florida mortgage, the mortgage carries uncapped tax at the same 35-cent level.
This is the myth that costs investors the most in budgeting. Someone reads that doc stamps on a note stop at $2,450 and assumes the bill stops there. It does not. The tax is paid on the recorded mortgage, so a larger loan keeps adding tax dollar for dollar.
Three related myths come up often:
- “Doc stamps and intangible tax are one charge.” They are two taxes, with different statutes, bases and exemptions. They tend to sit near each other on a closing statement, which makes them easy to confuse.
- “Deed stamps apply to my refinance.” Deed stamps are triggered by a transfer of title for consideration. A refinance with no deed transfer does not trigger them, though the note and mortgage taxes still apply.
- “Signing out of state avoids it.” The Department of Revenue treats a note signed elsewhere and sent to a Florida payee as taxable in some cases. More to the point, a mortgage on Florida property gets recorded in Florida, so where you sign does not change the result.
Does an LLC Change the Answer?
An LLC does not change the tax. Nothing in the Florida sources ties the tax to the type of borrower. It attaches to the note and the recorded mortgage. Many investors hold rentals in an LLC, and DSCR loans to entity borrowers are available subject to program terms. Holding title that way may suit your liability planning, but it does not avoid the state tax.
Two entity points matter for the renewal question. A new borrower on the new note is another reason an exemption may not fit. And if you add or swap obligors during the refinance, a title agent should look at that before closing.
Who Pays, and Can You Roll It In?
You pay. The intangible tax is legally the lender’s obligation, but lenders generally pass it to the borrower on the closing statement. Doc stamps appear there as well. Neither is a lender fee, so neither is negotiable. The state sets them.
Whether they can be financed into the loan is a leverage question. Rolling closing costs into the balance raises the loan amount, which raises the taxed base slightly and eats into your LTV headroom. On a cash-out capped around 75% LTV on most programs, that headroom is already the binding limit.
Build the tax into your cash-to-close or net-proceeds math from day one. Out-of-state investors in particular tend to leave state taxes off their first spreadsheet, and that can shrink the cash you expected to pull out.
What Else Limits Your Cash-Out
The tax is only one input. The loan still has to clear the program rules. On most programs in the network, a cash-out on a standard investment rental sits at 75% LTV or lower, with about 6 months of ownership measured from title recording. Short-term-rental collateral is more conservative, with a 70% cash-out ceiling.
Coverage matters too. 1.00 is where many select programs start for rent compared against the full monthly obligation, and a separate select-lender path takes coverage below 1.00 with leverage and terms adjusted. Credit floors begin at 620 in parts of the network, most programs want around 660, and 700 and up opens the strongest leverage tiers. Reserves are commonly around 6 months of PITIA (principal, interest, taxes, insurance and any association dues), stepping up to about 9 months above $1,500,000. Loan sizes run up to $3,000,000 on standard programs.
Clearing 1.00 does not mean the property cash flows. Coverage compares rent to the payment only. Repairs, vacancy, management and the closing taxes above sit outside it. Everything here is subject to lender guidelines and individual underwriting.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
The Investor Decision
Weigh the refinance in two steps. First, ask what the equity is worth to you after the state taxes and other closing costs. Second, compare that against what the new terms save or what the next deal earns.
Honestly, this is where thin cash-outs go wrong. If the payoff is large and the cash you would receive is small, the fixed tax load can swallow a meaningful share of it. A larger pull spreads the same percentage cost across more usable dollars. The stronger play is often to wait until the equity justifies the whole package, though an investor with a time-sensitive acquisition may reasonably decide otherwise.
For the broader picture of how cash-out files get built, see Lendmire’s complete DSCR loans guide. For how these taxes behave for owners who live out of state, Lendmire has a separate piece on whether an out-of-state owner pays Florida doc stamps on a full rental HELOC, titled Does an Out-of-State Owner Pay Florida Doc Stamps on a Full Rental HELOC?, which covers that angle.
Key Terms Defined
Documentary stamp tax (doc stamps): A Florida tax on written debts and recorded mortgages, charged at 35 cents per $100 of the indebtedness.
Nonrecurring intangible tax: A one-time Florida tax of 2 mills per dollar on obligations secured by Florida real property.
Renewal: A refinance structured as a continuation of the old loan, which can limit the tax to the increase in unpaid principal.
Closed-end note: A loan funded in one lump sum, as a DSCR cash-out is, so the taxed base is the full amount from day one.
Seasoning: The ownership period a lender wants before it will fund a cash-out, about 6 months on most programs.
Running Your Own Numbers
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. As a mortgage broker arranging financing through select lenders across 41 markets, including Washington, D.C., it places files with lenders that review each one individually. This is not a commitment to lend. The site’s calculator gives an illustrative estimate only, and your title agent confirms the actual state tax at closing.
Frequently Asked Questions
Do I pay doc stamps on the portion that just pays off my old loan?
Yes, in the ordinary new-lender refinance. The tax base is the full principal on the new note and recorded mortgage. It does not matter that part of the proceeds retire the previous lender’s loan. The payoff portion drops out only when the deal qualifies as a renewal, and that is rare when a different lender is involved.
Is there a cap on the tax for a large cash-out?
Not on the mortgage. The $2,450 cap applies to promissory notes, not to mortgages or liens recorded in Florida. Since a DSCR loan is secured by a recorded mortgage, the tax grows with the loan balance. The intangible tax does have a ceiling tied to the value of the Florida property securing the loan.
Does the deed tax apply when I refinance?
No, as long as title does not transfer. A refinance with no deed change skips them, but the note and mortgage taxes still apply.
Can a same-lender refinance avoid the full tax?
Sometimes. A qualifying renewal can reduce the base to the increase in principal, and the intangible tax exemption requires the same lender. That structure is not the usual DSCR path, so ask a Florida title agent or tax attorney whether your file fits before counting on it.
Does closing in an LLC or signing out of state reduce the bill?
Neither does. The tax attaches to the note and the recorded mortgage, not to the borrower type or the signing location. A mortgage on Florida property is recorded in Florida either way.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire, NMLS# 2371349, is a non-QM mortgage broker serving real estate investors in 41 markets, including Washington, D.C., through DSCR investor loan programs. Qualification is generally reviewed around the subject property’s rental income, not the borrower’s W-2 history — a practical fit for LLC-titled portfolios and self-employed investors. All scenarios remain subject to lender review and program guidelines. Two consecutive Scotsman Guide Top Mortgage Workplace recognitions (2025, 2026).
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References
1. floridarevenue.com: Tip 24b04
2. Fla. Admin. Code R. 12B-4.051
4. Fla. Admin. Code R. 12B-4.052
5. Moffa Tax Law – commentary on the Florida refinancing decision
This article is part of Lendmire’s investment property cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Does Paying Off a HELOC in a Refinance Make It a Cash-Out Refinance? · Cash-Out Refinance Now vs HELOC Now and Refinance Later · Cash-Out Refinance vs HELOC for Blended Cost and Flexibility
Guides: Investment Property Cash-Out Refinance in Florida
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.