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Federal program to help first-time buyers use tax credit for downpayment

May 13, 2009

001WASHINGTON – May 13, 2009 – First-time homebuyers will soon have another option if they want to use their $8,000 tax credit toward a downpayment. On the tails of a Florida-created program that Gov. Charlie Crist is expected to sign into law, the federal government announced its own downpayment assistance program at the National Association of Realtors® Midyear Legislative Meetings & Trade Expo taking place this week in Washington, D.C.

While the tax credit applies to “first-time homebuyers,” the term is misleading. In general, anyone who hasn’t owned a home for the past three years is considered a first-timer under the program. Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development (HUD), hopes to have additional details available within a few days, though it’s still unclear how soon homebuyers can apply for the credit.

Donovan said that the Federal Housing Administration (FHA) would allow its lenders to credit homeowners up to $8,000. He made the announcement to several thousand Realtors yesterday at a special daylong session called, The Real Estate Summit: Advancing the U.S. Economy.

“We all want to enable FHA consumers to access the homebuyer tax credit funds when they close on their home loans, so that the cash can be used as a downpayment,” Donovan said. According to Donovan, FHA approved lenders will be permitted to “monetize” the tax credit by using short-term bridge loans. Donovan also said that more will be done, and the Obama administration plans to further stabilize the housing market.

“I do think we have some early signs that the market overall is stabilizing,” said Donovan. “Since January, we’ve seen both home sales moving up and down around a relatively stable number, and we are seeing the first signs that the rapid decline in home prices is starting to abate.”

© 2009 FLORIDA ASSOCIATION OF REALTORS®

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Unpaid real estate property taxes in Tampa Bay skyrocket

April 20, 2009

property-tax-bill1According to the St. Petersburg Times a record number of property taxes are going unpaid in Tampa Bay thus depriving our area of millions of dollars of tax revenue. As of April 2009 114,000 properties had overdue tax bills totaling more than $300 million.

  • Hillsborough County property owners owe the most, with nearly $160 million overdue, a 6 percent increase from last year.
  • In Pinellas County, property owners have not paid about $116 million in taxes, up 18 percent from last year.
  • Pasco County has $35 million outstanding, while Hernando County property owners owe about $20 million.

The St. Petersburg Times reports that about a third of the properties with overdue bills are homeowners. The rest are commercial properties, including First Central Tower in downtown St. Petersburg, the Tierra Verde Marina, the Brookside Apartments in Temple Terrace, and the Safety Harbor Spa.

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Short sale doc stamp problems causing angst at closing time

March 10, 2009

TALLAHASSEE, Fla. – Sept. 3, 2008 – Should documentary stamp taxes levied against a short sale be based on the sale amount or on the sale amount plus money forgiven by the original lender? It’s a simple question without a simple answer, and it impacts closings in Florida.

The problem is fairly new, and arose with the large number of short sales. Florida law does not clearly state whether the doc stamp taxes owed on a deed should be based on the sale price paid by the purchaser, or on the sale price plus any existing debt forgiven by the bank. Consequently, local governments make their own decisions and charge different amounts.

The Florida Association of Realtors (FAR) contacted the Florida Department of Revenue (DOR), the Attorney General’s office and the governor’s office when the problem became clear. As the dispute intensifies, it could shut down some closings and impact an already soft real estate market.

“Meetings with officials have continued,” says FAR Public Policy Representative Trey Price. “Last week, FAR had a two-hour meeting with eight DOR personnel, including both the head of the agency and the general counsel.”

Some local government officials and others within the real estate community mistakenly think the issue has already been decided, based on a widely circulated one-page letter on DOR letterhead that claims doc stamps are due on the higher amount.

But a top DOR official says, “No official position has yet been issued by the department.”

FAR officially requested a Technical Assistance Advisory (TAA) with DOR, which would provide Realtors a specific document to explain the short sale doc stamp procedure. Bob McKee, deputy executive director of the agency, adds, “We anticipate that official position to be taken very soon in the form of the TAA requested.”

While FAR hopes that an outcome favorable to all parties will occur (an advisory using the lower amount), Price warns that an unfavorable outcome is possible. “FAR is prepared for that outcome as well, including exploring possible ‘amnesty’ avenues the Florida Legislature could enact to protect earlier short sale transactions.”

FAR received notification yesterday that the TAA should be available soon. “Advisories can sometimes take months or even a year before a conclusion is made, so the DOR expediency illustrates their understanding of the importance of this issue,” says Price.

FAR will continue to follow the short sale problem and keep members informed of any updates.

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$8,000 Tax Credit for 1st-Time Home Buyers

February 20, 2009

money1Whether you’re a Democrat or Republican you’ll probably appreciate the new tax credit for first-time home buyers. Obama signed this bill into effect recently allowing for an $8,000 tax credit available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Repeat: you don’t have to pay the money back!

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Ammendment 5 Off Nov. 4 Ballot

September 3, 2008

The Florida Supreme Court ruled this afternoon to uphold the circuit court’s decision to remove Amendment 5 from the November ballot.

The courts’ ruling ends a long and arduous fight to help provide property tax relief to Floridians. The court’s main consideration for removing the amendment from the ballot was the language in the amendment’s summary which said education funding would be held harmless. According to the amendment, funding would only be held harmless for the first year and then would leave education funding in the hands of the legislature.

Stay tuned for any new developments.

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