Gainesville Florida Homes

Federal First-Time Homebuyer Credit

Oh yea! Gainesville Florida homes are eligible for federal first time homebuyer credit. And effective July 1, 2009 the State of Florida will be advancing this credit to eligible first time homebuyers for home purchase downpayment (see below). For the federal tax credit, first time homebuyers may be able to take advantage of a tax credit for homes purchased in 2008 or 2009.

This credit:

• a.     Applies to purchases that close after April 8, 2008 and before December 1, 2009.
• b.     Applies to homes used as taxpayer's principal residence.
• c.      Reduces  taxpayer's tax bill or increases his or her refund
• d.     Is fully refundable even if they owe no tax or the credit is more than the tax owed.

Now here are the main differences:

• a.     If you purchased your main home in 2008 the credit (up to $7500 maximum) is really an interest free loan that must be repaid in 15 equal annual installments beginning with the 2010 income tax year.
• b.     If you purchased your main home in 2009, and before December 1, 2009, the credit (up to $8,000 maximum) does not have to be repaid unless the home ceases to be the main residence within a three year period following the purchase.

The first time homebuyers who purchase a home in 2009 can claim the credit on either their 2008 tax return or their 2009 tax return. The credit cannot be claimed before the closing date. A taxpayer can still claim the credit on their 2008 tax return by either filing an extension of time to file their tax return or by filing an amended return.

You are considered a first time homebuyer if you purchased your main home located in the United States after April 8, 2008 and before December 1, 2009. You and your spouse, if married, did not own any other main home during the 3 year period ending on the date of purchase. The credit is the smaller of $7500 in 2008 and $8000 in 2009 or 10% of the purchase price of the home.

Here Comes the Gotcha

There are a number of exceptions for taxpayers who cannot claim the first time homebuyer credit. You should consult a tax preparer for the specifics. But the income limitation is if your modified adjusted gross income is $95,000 or more ($170,000 or more if married filing jointly).

Florida to the Rescue

Florida Governor Crist signed a budget bill that for those who qualify for the federal $8000 first-time homebuyers' tax credit, beginning July 1, 2009, will be able to apply for downpayment assistance from the State of Florida before they close on the purchase of their home. The downpayment assistance is actually a loan that will be repaid by the applicant once they receive their tax refund. Details are still being worked out for the administration of this program.