Newsletter: November 2009 Newsletter

Obama signs bill: Homebuyer tax credit extended what it means for you.

President Obama signed H.R. 3548 on November 6, 2009, enacting into law an extension, and adjustment, of the $8,000 tax credit for first-time buyers. Among other things, the extension adds money for certain move-up buyers; creates one deadline for signing a contract and a later deadline for closing; changes income requirements; and limits a purchased home’s cost to $800,000.



“Extending the homebuyer tax credit and expanding it to reach more homebuyers is the right thing to do,” says 2009 Florida Realtors® President Cynthia Shelton. “It is critical to maintaining the positive momentum we’ve been experiencing in the housing market and in the overall economy. Florida Realtors applaud congressional leaders for taking action to extend the homebuyer tax credit into 2010, which will help Florida families realize their dream of homeownership, improve our communities and strengthen our economy.”



John Sebree, Florida Realtors vice president of public policy adds, “Florida residents enjoy two additional advantages. The Florida Homebuyer Opportunity Program (FHOP), created by the Florida Legislature earlier this year, still has approximately $28 million that first-time homebuyers can access and use toward their down payment. And move-up buyers now have the ability to ‘port’ their current property tax savings to a new home.”

First-time homebuyers



Most details for first-time homebuyers mirror the rules currently in existence. The maximum tax credit remains $8,000 ($4,000 for married individuals filing separately), and anyone who has not owned a home within three years is considered a “first-time buyer.” 


• A purchase must be under contract by April 30, 2010.


• A purchase under contract by April 30 must close no later than June 30, 2010.


• After Dec. 1, 2009, income limits rise to $125,000 for singles and $225,000 for married couples; up from limits effective through Nov. 30 of $75,000 for singles and $150,000 for married couples. The tax credit phases out incrementally at each $20,000 increase in income.
• 

Effective immediately: The maximum home value purchased cannot exceed $800,000. Prior to the law being signed, first-time homebuyers had no limitation on a home’s cost.


Current homeowner tax credit



An existing homeowner who purchases a home may now claim a tax credit of up to $6,500. To qualify, that owner must have owned and used the same residence as a principal residence for any consecutive five-year period in the previous eight years.

• 

This new tax credit is effective immediately. Eligible homebuyers do not have to wait until Dec. 1 to close in order to qualify.
• 

Personal income limits, maximum home value, and contract/closing deadlines are the same as those for first-time homebuyers.



Long-time Florida homeowners who enjoy discounted property taxes resulting from the state’s Save Our Homes amendment qualify for property tax portability, notes Sebree. For more information or to calculate how much tax savings can be transferred to a new home, visit floridarealtors.org at: http://www.floridarealtors.org/LegislativeCenter/TopInitiatives/index.cfm


Florida Homebuyer Opportunity Program



Under FHOP, first-time Florida homebuyers can obtain interest-free bridge loans to access their federal tax credit before they complete a home purchase, enabling them to use that money upfront for down payment and closing costs. Once buyers submit their returns to the IRS and receive their tax credit money, they repay their loans to the state.



The Florida Realtors-backed program came out of the 2009 session of the Florida Legislature. However, as part of the 2009-2010 budget year, did not become effective immediately. They tax credit extension will allow many first-time buyers to tap into the approximately $28 million in the program's remaining funds.



While funded by the state, the money is distributed through the city and county housing offices that operate the State Housing Initiatives Partnership (SHIP) program. There is no standardized program, and each local agency may operate under different rules for distribution. For more information, buyers should contact their local SHIP office.



To find a local SHIP office, go to: http://apps.floridahousing.org/StandAlone/FHFC_ECM/AppPage_SHIPLGContacts.aspx.

Additional changes



The tax credit extension includes other new rules, such as: 


• The new law also impacts dependent purchases of homes, which weren’t addressed under the old rules.



• The new law requires a buyer to attach documentation about the home purchase to his or her income tax return. An audit found that some buyers are claiming the tax credit when they don’t deserve it, and investigators continue to seek out fraud. To minimize tax abuse going forward, buyers won’t receive the credit without submitting proof to the Internal Revenue Service (IRS).



The homebuyer tax credit is collected as part of the normal income tax process. As a credit, it’s calculated separately from an individual’s income tax, and paid regardless of taxes owed or withheld from income. As always, however, only a tax planner can render specific advice to anyone seeking the credit. For more information on the credit, contact a tax planner or visit the IRS website at: http://www.irs.gov.



Florida Realtors will update tax credit information and clarify details when available on the Homebuyer Center, part of floridarealtors.org at: http://www.floridarealtors.org/AboutFar/homebuyercenter/index.cfm.



© 2009 Florida Realtors®

Help save a home from foreclosure

As Realtors® it is our duty to help clients to do everything we can to stop foreclosures. A new video from Freddie Mac gives owners valuable information about how to expedite a loan modification request.  This video is post on YouTube.com gives information on late payment borrowers on how to gather the financial documents before calling a mortgage servicer that can cut time needed to determine their eligibility and process their application for a loan modification under President Obama’s Making Home Affordable program or Freddie Mac’s other workout initiatives.  The video “Stop Foreclosure Documents Your Lender Needs to Help You” can be viewed at Freddie Mac’s YouTube channel at www.youtube.com/FreddieMacWeb .

Be alert on timeshare promises

With timeshare sales selling at a slower pace the number of fraud cases are rising at a fast pace. The Attorney General of Florida has posted an informative web page on How to Protect Yourself: Timeshares Sales and Resales at http://myfloridalegal.com.  Some of these companies are not licensed real estate brokers which makes consumer complaints difficult to investigate. Before you sign on the dotted line check out the company and read the article to save you both time and money.

Holiday Lights Spectacular at Roger Dean Stadium in Jupiter Florida

FLORIDA'S NEWEST HOLIDAY TRADITION! Capture the magic of the holiday season with this 20-minute dazzling light show synchronized to holiday music. This one-of-a-kind show, featuring more than 140,000 LED lights, 48 steel trees, a 50' tree, leaping arches, a twinkle wall and fireworks styled aerial displays will delight every member of the family. Free holiday activities to celebrate the season. For more details visit BrightNightsPB.com for shows and nightly activities. Visit www.BrightNightsPB.com for shows and nightly activities.

Looking for a winter rental?

The 2010 season here in Palm Beach County is in high demand for vacation rentals. Our inventory is going fast. Give us a call soon if you have not made you winter plans yet. You can reach us at 561-685-0976.

Happy Thanksgiving

All of us at One World Realty wish you and yours the best during this day of celebration.  As we all know this day of celebration was in honor of a good harvest and dates back to 1621.  In 2009 we at One World Realty are combining this celebration with the rebound in real estate here in South Florida. Not that we will ever have a national holiday to celebrate this.  We do realize that so many homeowners and real estate related businesses feel blessed that our local economy is on the rebound. We are very thankful to have helped so many people in finding a home and helping others stay in their homes during this turbulent times within our economy. All our best to you on this special day and we look forward in serving you in the future.