Florida first-time home buyers are in a great position right now, thanks to the $8,000 First-Time Home Buyer Tax Credit. If you’re considering a home purchase between now and November 30, 2009, and you plan to live in your Florida home for 3 years or more, then you simply must take advantage of this true $8,000 Tax Credit.
I’ve pulled together some answers to five of the most frequently asked questions (FAQs) concerning the First-Time Home Buyer Tax Credit. I hope you find them useful:
Who Qualifies for the $8,000 First-Time Home Buyer Tax Credit?
You are eligible to receive this tax credit so long as you adhere to the following:
- You have never owned a home – or, have not owned one in the past 3 years – determined by HUD 1 date when previous home was sold (Note: If married and you did not own a home within the last 3 years, but your spouse did, then you do not qualify)
- You have or will buy your home as a primary residence between January 1 and November 30, 2009
- You can show that if you owned a rental property or vacation home, it was not used as a primary residence over the last 3 years
- If you’re unmarried and you are buying the home with another person who owned a home within last 3 years but you did not, you can “designate” the tax credit to you – qualifying you as the First Time Home Buyer (FTHB)
- If your parents cosign on a mortgage (and own a home) and you are the FTBH, then you are eligible for the tax credit.
- Non-US Citizens may qualify if they meet resident-alien status (IRS Pub 519)
- Revenue or Housing Bond financing are eligible for tax credits.
What Types of Properties are Eligible for the Tax Credit?
- Primary Residence – Single family, 2-4 units (must occupy one unit) town homes, condos, manufactured homes, mobile homes and houseboats. Yes, houseboats!
- For new construction – The “Purchase Date” is the date that you begin to occupy the home (between Jan 1 and Nov. 30, 2009) Note: You can have owned land and be in the process of building.
What Income Limits Are Associated with the Tax Credit?
- $75,000 Single Person (Partial Credit up to $95,000)
- $150,000 Married Couple (Partial Credit up to $170,000)
- Totals are based on Adjusted Gross Income (AGI) line on IRS Form 1040, 1040A or 1040EZ
What Exact Amount is Awarded via the Tax Credit?
- You may be eligible to receive a maximum of $8,000, or the amount equal to 10% of home’s sales price – up to this amount. If you buy for $75,000, then you are eligible for only $7,500.
- Up to Maximum of $8000
- Partial Tax Credit if income exceeds $75,000 or $150,000
Does the Tax Credit Have to be Repaid?
- No. As long as you stay in the home for a minimum of 3 years, you do not have to pay back the tax credit.
- Note: If you sell within 3 years, the entire tax credit needs to be repaid!
Need to apply for the First Time Home Buyer Tax Credit? Be sure to download and complete IRS First-Time Home Buyer Credit Form 5405.
As always, you need to consult with your tax professional regarding how this tax credit will impact your finances. That said, if you’re planning to buy a Florida home in the near future – or any time up through November 30, 2009 – taking the $8,000 First Time Home Buyer Tax Credit is a no-brainer!
Have any other questions regarding this issue? Comment here, and I’ll do my very best to get back to you ASAP!
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I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage broker, I’m your guy. Call me at 863-604-3019 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
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I’m surprise that houseboats count towards the tax credit. But I guess it makes sense if you’re going to live on it for 3+ years.
This really is a great opportunity for those looking to buy a home for the first time!
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LOL… I know! But hey… how many movies have we seen where some bachelor lives in a houseboat? FL sure is the place for it!
Is there a way to get this money “upfront” to use towards the down payment rather then in a tax return that won’t be realized until almost a year after moving into the house? Is it possible to get some kind of loan to secure this money for down payment purposes to buy the house in the first place?
@Chris Hagan – I’d advise folks to look into a gift from family on this one. Several of my clients have done this – as it’s easier to secure money to help with the downpayment from a family member when you can show them that you’ll be getting the tax credit to pay it back.
@Chris Hagan – DOLP! Sorry, you can also buy a home in 2009 and claim it on your 2008 taxes (the $8,000 credit, that is) retroactively. Definitely tell your folks about that option. And, as always – check with your local tax professional for details.
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How much do you ACTUALLY receive of the new home buyer credit?
How much of the new home buyer tax credit will I actually receive after its taxed. My first home will be way over 80,000 dollars so I expect to receive the full 8 grand up front in January.
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As long as you fall within the income limitations and have not owned a home within the past 3 years – you should received the full $8,000. It’s a credit, so if you have $2000 coming back to you, you’ll get $10,000. If you owe $2000, you’ll get $6000 back.
Hello and thanks,
I’d like to know if I can get that tax credit in advance and use for the down payment and where or how can I get it?
Thanks.
Hi,
What happens if someone buys a home, get the credit, then defaults on the loan? Do they have to pay the credit back?
Hey Greg – well, the IRS does require you to stay in the home for 3 years or risk paying the money back. If you default before this time period, my guess is yes – you’ll have to repay the credit. However, consult your tax professional to confirm this.
I just have a question in regards to the tax credit . Is it to late for me to apply for it . I am a first time home buyer and we are really looking foward into buying a house.
Michelle – by my calculations, you have just under 2 1/2 months to sign a contract on a house and still get in under the December 1, 2009 Deadline. NOTE: Your home purchase must close on or before December 1 for you to claim this credit.