It had been commonly understood that property owners who rent their entire dwelling for long periods of time forfeit the benefit of homestead. The underlying rationale for the termination of homestead due to long-term rentals is that the owner’s long-term rental activity, coupled with his or her implied absence from the property, signifies the owner’s intent to reside elsewhere. Therefore, the owner’s departure and residence elsewhere, coupled with the conversion of his or her home into a commercially oriented use (a rental), reveals an “intent” to abandon the homestead. (1)

By contrast, there are occasions when property owners do not intend to abandon their residence through rental. For example, numerous Floridians rent out their homes for short periods of time and may even remain on the premises during the course of these rentals. These short-term or seasonal renters are now finding themselves forced to defend their right to their homestead exemption, even when they still consider their home to be their permanent residence. The purpose of this article is to explore the effect of a rental on the homestead exemption and to recommend legislative revisions aimed at clarifying the permitted contours of rental activity in the context of a homestead abandonment case.
Early History of Abandonment of Homestead Through Rental

Florida courts have traditionally emphasized that a determination of homestead abandonment is made on a case-by-case basis. In particular, courts conduct a factual inquiry as to whether the owner’s rental activity constituted abandonment of the homestead. (2) Nevertheless, early cases and guidance from the Florida attorney general directly supported the preservation of homestead, even when the property owner engaged in rental.

In early cases in which homestead was restored, the homeowner had left personal property onsite and otherwise manifested an intent to return. (3) Moreover, the Florida Supreme Court’s jurisprudence on the subject emphasized that the owner’s continuous physical presence without interruption was not required to preserve homestead. (4)

The Legislative “Fix”

The Florida Legislature attempted to codify and clarify the early case law on abandonment through rental when it adopted FS. [section] 196.061(1996) (rental statute). The rental statute can be summarized as follows. The rental statute requires there to be a “rental.” Second, the rental must be of the “entire dwelling.” The rental of the entire dwelling constitutes an abandonment of the right to homestead. However, the statute contains an exception with an exception to the exception. The rental statute provides that property owners do not lose homestead if they had established homestead through permanent residency on January 1 of the year. (5) For example, if an owner of homesteaded property rented the dwelling on January 2, but had qualified for homestead on the first, homestead would not be lost for that year. However, this exception cannot be utilized for two consecutive years. (6) The rental statute is not the model of clarity and is ambiguous in several instances. As discussed more fully below, the rental statute does not define what a “rental” means or what constitutes the “entire dwelling.”

Deference in Statutory Construction

The threshold question in all ad valorem property tax disputes is whether the rules of construction of the applicable statutes favor the homeowner or the property appraiser. In large measure, the outcome of this inquiry depends on the nature of the tax exemption in question. Unlike the bulk of tax exemptions, the right to a homestead exemption sounds in the Florida Constitution. (7) The fact that homestead is a constitutional right in comparison with other nonconstitutional exemptions does not end the inquiry in favor of the property owner.

Florida courts have struggled with the burden of proof and deference due to property owners in homestead cases. As illustrated, the case law is somewhat inconsistent. However, it can safely be said that homestead is a “qualified constitutional right” because homestead must be applied for.

Florida courts have explained that the legislature may establish appropriate limits in terms of qualifying for the right to homestead. (8) For example, the Florida Legislature has established requirements for the application and processing of homestead applications. (9) Moreover, the legislature established criteria to be utilized for determining “permanent residency” (the threshold requirement for qualifying for homestead). (10) For example, in ES. [section] 196.015 (2009), the legislature provided property appraisers with criteria to utilize in determining permanent residency. The criteria include an assessment of the address provided on items such as a recorded sworn statement of domicile, voter registration, driver’s license, utility statements, bank statements, vehicular registration, and business licensure. (11)

However, in contrast to cases dependant on whether an owner qualifies for homestead (e.g., whether the owner meets the criteria of [section] 196.015), the rental statute appears to assume that the property owner has already established or qualified for homestead. The inquiry becomes whether the now established right to homestead has been abandoned. Lest there be any doubt on this point, the authors respectfully pose the following question: How can a right be “abandoned” if the owner had not qualified for the right to begin with? Moreover, recall that [section] 196.061 is entitled “Rental of homestead to constitute abandonment.” The distinction between qualifying for the right and having the established right taken away by deeming it abandoned is important because Florida courts have deferred to property appraisers in cases addressing the act of qualifying for homestead. By contrast, Florida courts have, with a few notable exceptions, zealously protected the established right to homestead.

There is a sizeable gulf between general tax exemption cases and cases interpreting the constitutional right to homestead. In cases addressing nonconstitutional exemptions, Florida courts have generally held that tax exemptions are to be construed against the individual claiming the exemption. (12) Therefore, the burden favors the property appraiser during the initial qualification phase. (13)

By contrast, once the right to homestead has been established, Florida and federal courts have generally been protective of the right in cases both when homestead is used as a shield against creditors and when the established right to homestead has been called into question. (14) A 2001 decision from the Florida Supreme Court in the case of Havoco of America, Ltd. v. Hill, 790 So. 2d 1018 (Fla. 2001), illustrates the deference given to the homeowner once homestead has been established. The Florida Supreme Court held:

[T]his Court’s homestead exemption jurisprudence has long been guided by a policy favoring the liberal construction of the exemption: “Organic and statutory provisions relating to homestead exemptions should be liberally construed in the interest of the family home. A concomitant in harmony with this rule of liberal construction is the rule of strict construction as applied to the exceptions. (15)

The Florida Supreme Court’s decision in Havoco was consistent with an earlier decision of the Second District Court of Appeal in the case of Poppell v. Padrick, 117 So. 2d 435 (Fla. 2d DCA 1959). In that case, the property owners’ homestead status was restored when the owners rented their homesteaded property to live with their widowed mother for a number of months over the course of several years. (16) The Second District held:

Once the property has acquired the status of a homestead, this status would continue until an abandonment has occurred which being dependent upon the intent of the claimant, is a question of fact to be determined in each particular case…. (17)

In considering the question of whether a homestead status has been acquired or whether it has been abandoned, a court in its determination must be guided by certain fundamental principles. The constitutional and statutory provisions concerning homesteads should be interpreted in the liberal and beneficent spirit in which they were conceived and enacted in the interest of the family home. (18)

In what could be viewed as an emergent split from the Florida Supreme Court’s pronouncement in Havoco and the Second District Court of Appeal’s decision in Padrick, the First District Court of Appeal recently held that the rule of strict construction for nonconstitutional exemptions applies to the rental statute. In Haddock v. Carmody, 1 So. 3d 1133 (Fla. 1st DCA 2009), the First District Court of Appeal held that the owner of a condominium on Amelia Island had abandoned homestead under the rental statute even though the owner had locked two closets prior to leaving the unit. (19) The property owner argued that it had not rented the “entire dwelling” and, therefore, the rental statute did not apply. (20)

Based on the totality of the circumstances, the First District held that the owner had abandoned his homestead for the years in question. (21) However, the First District went a step further and lumped cases involving the rental statute with other cases pertaining to the qualification for homestead. (22)

In this regard, an argument could be made that the First District’s holding in Haddock directly conflicts with the Second District’s earlier opinion in Padrick. Again, in Padrick, the Second District, relying on prior opinions from the Florida Supreme Court, had stated “[t]he constitutional and statutory provisions concerning homesteads should be interpreted in the liberal and beneficent spirit in which they were conceived and enacted in the interest of the family home.” (23)

It does not appear that the First District has attempted to create a volte face on the issue of statutory construction, especially when doing so would create a conflict with holdings of the Florida Supreme Court and other district courts. The authors respectfully submit that Haddock may be harmonized with other cases interpreting homestead. Put simply, Haddock should be read as a case where the sheer weight of the evidence mandated the revocation of homestead. However, as illustrated in Haddock, it can be said that the rental statute is ambiguous as it fails to provide definitions for the terms “rental” and “entire dwelling.”

Rental v. License

The rental statute uses the specific term “rental.” The term “rental” is a legal term of art which describes the act of granting possession of the property to another. In Florida, a rental is treated as being virtually identical to a lease. (24) As such, an argument could be made that the rental statute is not triggered when an owner allows an individual to stay on the property in which no residential tenancy has been created. For example, an owner may elect to issue a lesser form of permission to a guest by way of a license agreement. In the lease or rental paradigm, the owner and the tenant execute an agreement which gives the lessee or tenant exclusive use and possession of the premises for a set period of time. (25) By contrast, a license agreement gives the licensee or guest a privilege to enter upon the premises. Generally, licenses are revocable upon relatively short notice, disclaim the creation of a tenancy, and reserve to the owner a co-terminus right of access and entry to the premises. (26) The distinction between leases and licenses in application to a property tax case recently came to light in the case of Turner v. Florida State Fair Authority, 974 So. 2d 470 (Fla. 2d DCA 2008).

In Turner, the Florida State Fair Authority maintained tax-exempt status over certain parcels utilized for state fairs. (27) The State Fair Authority entered into an agreement with a truck driving school to utilize the property when fairs were not being held. (28) While the property appraiser argued that the lease to a private party terminated the tax-exempt status of the property, (29) the Second District Court of Appeal disagreed and concluded that it was a license. (30) The Second District held:

We conclude that the [a]greement is a license, not a lease. A license does not confer an interest in the land but merely gives the licensee the authority to do a particular act on another’s land. The distinction between the rights of a lessee and those of a licensee is as follows: A tenant under a lease is one who has been given possession of land which is “exclusive even of the landlord except as the lease permits his entry, and saving always the landlord’s right to enter to demand rent or to make repairs.”A licensee is one who has a “mere permission to use the land, dominion over it remaining in the owner and no interest in or exclusive possession of it being given” to the occupant. (31)

To date, the authors note that no case has squarely addressed whether a license agreement triggers the rental statute. Nevertheless, on the basis of Turner, practitioners should consider minimizing their client’s exposure to the loss of homestead by carefully structuring agreements in a manner that disclaims tenancy and creates a license as opposed to a lease or rental.

Entire Dwelling

The rental statute does not explicitly define what constitutes the “entire dwelling” of one’s homestead. Again, the Haddock court held that excluding two closets from a rental did not preserve homestead. (32) In reaching this conclusion, the First District rejected giving the term “entire dwelling” its literal meaning. (33) The First District reasoned that the literal meaning could lead to absurd results whereby the homeowner avoids application of the rental statute by excluding a de minimus portion of his or her prop property from rental. (34) However, it does not appear that the First District intended to simply ignore the words “entire dwelling,” as doing so would contravene a seminal rule of statutory construction requiring courts to give meaning to each word. (35)

By contrast, the tenor of the opinion suggests that the court did not want to reward a property owner who, in all respects, appeared to have abandoned homestead. (36) In particular, the owner’s unit was located on Amelia Island, which is commonly understood to be a resort-oriented community. (37) Second, the owner’s unit was placed into a corporate rental pool, and the owner had to act affirmatively to withdraw the unit for his personal use. (38) Last, the owner locked off two closets, which again the court appears to have treated as a de minimis amount of space. (39) As such, the First District refused to allow the homeowner to hang his hat on the singular argument that because a closet was locked off to tenants, the “entire dwelling” was not rented and, therefore, homestead was saved.

To harmonize Haddock with past homestead jurisprudence, the authors submit that Haddock should be viewed as providing a baseline. In particular, “entire dwelling” does not mean two closets where the totality of the circumstances militate against homestead (e.g., the presence of a corporate rental pool and the property’s location in a resort community). However, moving beyond the baseline, it is important to note that the term “entire dwelling” should be given its ordinary meaning. The question necessarily becomes whether “entire dwelling” means the living areas of the house (e.g., bedrooms) or if it simply means more than a de minimus amount of space.

Webster’s dictionary defines the term “entire” to mean “having no element or part left out,” “complete in degree,” “total,” or “consisting of one piece.” The authors are cognizant of the First District’s admonition against reading the rental statute too literally. However, the legislature has generously defined the term “dwelling” in at least two other sections of the Florida Statutes, and those definitions include the porch and curtialige of the property. (40)

Reading the terms “entire” and “dwelling” together, a good faith argument could be made that so long as the portion excluded is not de minimus, the rental statute should not apply. In this respect, Padrick and its progeny are instructive. In particular, the authors submit that the area and possessions excluded from rental should evince the owner’s intent to return to the home. Therefore, leaving only a small amount of clothing and personal effects in a limited area may militate in favor of finding for abandonment. In contrast, the owner who leaves the bulk of his or her possessions on site and locks such possessions in large walk-in closets could be viewed as maintaining an intent to return sufficient to defeat a claim of abandonment.

Although such a conclusion finds support in cases predating Haddock, it is expected that property appraisers will argue for a more stringent application of Haddock, and practitioners are again cautioned that courts render decisions on such matters on a case-by-case basis.

Conclusion

The authors believe that in the coming years, property appraisers will aggressively pursue the removal of homestead in which the homeowner has engaged in rental. However, the rental statute is ambiguous and does not provide homeowners with adequate guidance in terms of the nature of rentals and whether the entire dwelling must be rented. These ambiguities have been compounded by the First District’s decision in Haddock which superficially purports to unwind long-standing precedent from the Florida Supreme Court. (41) Although Haddock can be harmonized with past precedent, the rental statute, coupled with a literal reading of the Haddock opinion, creates a series of problems for homeowners. Moreover, the problem is not limited to the wealthy, but creates a lack of rental opportunities for individuals who cannot afford a home. (42)

The authors believe an overhaul of the statute would be in order for the purpose of codifying long-standing notions of protection and preservation of the family home. More specifically, the authors respectfully submit that the rental statute should be amended to address the following issues when considering whether a homestead has been abandoned through rental: 1) The property appraiser’s burden of proving the rental constituted an abandonment (once the owner has already qualified for the homestead exemption); 2) the definition of the term “rental”; 3) the definition of the phrase “entire dwelling”; 4) a list of factors which shall be considered by the property appraiser in determining whether the property owner has demonstrated an intent to return to the home; and 5) additional guidelines on some type of meaningful investigation which must be completed prior to the revocation of a property owner’s established homestead exemption.

Given the current economic climate, in which Floridians may, in some instances, be compelled to offer their homes for short-term or seasonal rentals in order to keep their homes, it would seem unjust to require the burden to fall on the homeowner after they have already established homestead. Rather, it would seem more appropriate to set specific guidelines for property appraisers so they are better equipped to make a determination that the property owner actually intended to abandon their homestead through rental. A legislative clarification would simply re-enforce the deference given to homeowners by the Florida Supreme Court’s jurisprudence in which the established right to homestead has been questioned.

(1) See Fla. Stat. [section] 196.012(13) (“Real estate used and owned as a ‘homestead’ means real property to the extent provided in s. 6(a), [a]rt. VII of the State Constitution, but less any portion thereof used for commercial purposes, with the title of such property being recorded in the official records of the county in which the property is located. Property rented for more than six months is presumed to be used for commercial purposes.”).

(2) See generally Poppell v. Padrick, 117 So. 2d 435 (Fla. 2d D.C.A. 1959); Jacksonville u. Bailey, 30 So. 2d 529 (Fla. 1947). It should be noted that members of the armed forces who rent the homesteaded property due to active duty were deemed not to have involuntarily abandoned their homestead. See L’Engle v. Forbes, 81 So. 2d 214 (Fla. 1955).

(3) See, e.g., Jacksonville v. Bailey, 30 So. 2d 529 (Fla. 1947) (holding that homestead was not abandoned where the property owner resided in home for six years; the owner rented the home out during the winter season; and during the course of the rental, left his personal items on the property). See also Poppell v. Padrick, 117 So. 2d 435 (Fla. 2d D.C.A. 1959) (holding that a property owner who rented his home during the winter months; over the course of several years to live with his widowed mother; and maintained his personal property in the homesteaded property did not abandon homestead). See also Florida Att’y Gen. Op. 058-229 (property owner who rents a home in another county for work purposes did not abandon homestead where property owner had maintained homesteaded address for voter registration and voted in the subject county).

(4) Id.

(5) Fla. Stat. [section] 196.061(1996).

(6) Id. Moreover, the rental statute does not apply to members of the armed services. See id.

(7) Fla. Const. art. VII, [section] 6(a) (“Every person who has the legal or equitable title to real estate and maintains there on the permanent residence of the owner, or another legally or naturally dependant upon the owner, shall be exempt from taxation thereon, except assessments for special benefits, up to the assessed valuation of $25,000.00 and, for all levies other than school district levies, on the assess evaluation greater than $50,000.00 and up to $75,000.00, upon establishment of right thereto in the manner prescribed by law….”).

(8) See Horne v. Markham, 288 So. 2d 196 (Fla. 1973) (holding that Fla. Const. art. VII, [section] 6 does not establish an absolute right to a homestead exemption, but rather, provides that taxpayers who otherwise qualify shall be granted an exemption only upon “establishment of the right thereto in the manner prescribed by law”).

(9) Fla. Stat. [section] 196.011.

(10) Fla. Stat. [section] 196.015.

(11) Id.

(12) See Capital City Country Club, Inc. v. Tucker, 613 So. 2d 448, 452 (Fla. 1993); DeQuervain v. Desguin, 927 So. 2d 232 (Fla. 2d D.C.A. 2006); see also Parrish v. Pier Club Apts. LLC, 900 So. 2d 683, 685 (Fla. 4th D.C.A. 2005) (“[S]tatutes providing for an exemption from ad valorem tax are to be strictly construed, and any ambiguity is to be resolved against the taxpayer and against exemption.”). Presumably, non-constitutional exemptions are construed against the property owner because of the paramount public policy concern placed on the collection of ad valorem property taxes in a state that does not have an income tax. Statutory construction against property owners has also occurred in cases where the property owner is in the qualification or application phase for homestead.

(13) DeQuervain, 927 So. 2d 232 (Fla. 2d D.C.A. 2006) (holding that an alien without a visa did not establish requisite intent to maintain homestead during qualification phase, despite the facts that the homeowners had immigrated from Switzerland, resided legally in Florida, lived and worked in the county for at least five years, held Social Security numbers and drivers’ licenses, and paid federal income tax).

(14) See O Neal v. Miller, 196 So. 478 (Fla. 1940). It should be noted that the rule of strict interpretation will not apply when homestead is being used to perpetuate a fraud against a creditor. See In re Fin. Federated Title & Trust v. Levy, 273 B.R. 706, 713 (S.D. FL 2001). See also Colwell v. Royal International Trading Corp., 226 B.R. 714 (S.D. FL 1998) (when a creditor objected to separate homestead exemptions claimed by a separated husband and wife, the court concluded that an estranged couple living separately for an extended period of time in different residences deeded to them in their individual capacities were each entitled to claim separate homestead exemption). See also Monson v. First National Bank of Bradenton, 497 F.E2d 135 (5th Cir.1974) (reversing a bankruptcy referee’s finding of abandonment when a husband and wife lived outside of Florida while they were attempting to resolve marital difficulties). See also Nova v. Amerisource Corp., 860 So. 2d 506 (Fla. 3d D.C.A. 2003).

(15) Havoco, 790 So. 2d at 1021. It should be noted that the rule of strict interpretation will not apply when homestead is being used to perpetuate a fraud against a creditor. See In re Fin. Federated Title & Trust, 273 B.R. 706,713 (S.D. FL 2001). See also Colwell, 226 B.R. 714 (S.D. FL 1998). See also Monson, 497 F.2d 135 (5th Cir. 1974); Nova, 860 So. 2d 506 (Fla. 3d D.C.A. 2003).

(16) Padrick, 117 So. 2d at 436.

(17) Id. at 437; see also Miller v. West Palm Beach Atlantic Nat’l Bank, 194 So. 230,231 (1940); Fla. Att’y Gen. Ops. 79-50 (1979), 74-115 (1974), and 76-177 (1976).

(18) Padrick, 117 So. 2d at 437. Although discussed more fully later, it should be noted that there is a newly emerged split between the First and Second districts regarding the burden of proof in a case pertaining to rental abandonment.

(19) Haddock, 1 So. 3d at 1137-38.

(20) Id. at 1137.

(21) Id. Note that the rental program records reflected that the property owner’s unit was only rented for 113 nights in 2003, 104 nights in 2004, and 66 nights in 2005 (which equates to less than 20 percent of the entire year).

(22) Haddock, 1 So. 3d at 1137-38.

(23) Padrick, 117 So. 2d at 437 (emphasis added).

(24) The terms “rental” and “lease” are closely related but have historic differences which have become blurred in modern times. Leases were viewed as a form of rental whereby the term of the tenancy is established. By contrast, a rental would not have had a set term and could have been day-to-day or month-to-month. In common parlance, the distinction has generally been lost, and the terms “rental” and “lease” are now used interchangeably. For example, see Fla. Stat. [section] 212.02(10)(8), which groups the terms together in terms of triggering sales tax. See also FLA. STAT. Ch. 83, which establishes the rights and obligations between tenants and landlords. Moreover, “rental agreements” as set forth in Ch. 83 establish residential tenancies.

(25) The authors note that Ch. 196 of the Florida Statutes provides that “property rented for more than [six] months is presumed to be used for commercial purposes.” See Fla. Stat. [section] 196.012(13). The authors believe this section further illustrates that periods shorter than six months (which are typical of seasonal or short-term licensing or rental situations), may not necessarily trigger the rental statute.

(26) The Florida Legislature demonstrated that it understands the distinction between licenses and rentals, as it has defined the terms differently in statute. See, e.g., Fla. Stat. [section] 212.02(10)(8), which groups leases and rentals together. By contrast, that same section defines a “license” to mean “the granting of a privilege to use or occupy a building or parcel of real property for any purpose.”

(27) Turner, 974 So. 2d at 471.

(28) Id.

(29) Id. at 472.

(30) Id. at 473.

(31) Id. (emphasis added). The distinction between licenses and leases is important in cases assessing the liability of the owner for the injury of tenants as opposed to guests. See, e.g., Benton v. Morton & Furbish Agency, 929 A.2d 471 (Me. 2007), in which the Maine Supreme Court held that a two-week rental of a cottage constituted a license, not a lease. The court held, in pertinent part, that “[t]he limited two-week duration of the rental provides strong evidence for the conclusion that Blevins occupied the cottage pursuant to a license. Although a short rental term is not dispositive on the license or tenancy issue, it strongly suggests that the cottage rental was more akin to a place for travelers, lodgers, and transient guests, and did not convey a “possessioy interest in the land to another for a period of time…. The key to deciding whether there is a lease is whether the occupant is entitled to possession and exclusive occupancy of the premises. The family’s subjective belief that no one would interfere with their possession does not compel the conclusion that the family was entitled to legal possession. Based on the undisputed facts in this case, we conclude that the arrangement did not entitle the vacationing family to possession and exclusive occupancy of the premises.” Id. at 475 (emphasis added).

(32) Haddock, 1 So. 3d at 1137-38.

(33) Id. at 1137.

(34) Id.

(35) See Davis v. Florida Power Co., 60 So. 759,765 (1913).

(36) Haddock, 1 So. 3d at 1137.

(37) See, e.g., Amelia Island Plantation: Florida’s Premier Island Resort, http://realestate.aipfl.com.

(38) Haddock, 1 So. 3d at 1134.

(39) Id.

(40) For example, in Fla. Stat. [section] 776.013(5)(a) (emphasis added), the Florida Legislature defines the term “dwelling” to mean: “a building or conveyance of any kind, including any attached porch, whether the building or conveyance is temporary or permanent, mobile or immobile, which has a roof over it, including a tent, and is designed to be occupied by people lodging there at night.” In Fla. Stat. [section] 810.011(2) (emphasis added), the Florida Legislature defined the term to mean: “a building or conveyance of any kind, including any attached porch, whether such building or conveyance is temporary or permanent, mobile or immobile, which has a roof over it and is designed to be occupied by people lodging therein at night, together with the curtilage thereof.”

(41) See generally O Neal, 196 So. at 478-79; Havoco, 790 So. 2d at 1021; Bailey, 30 So. 2d at 530.

(42) The authors submit that a construction of the rental statute against the property owner disincentivizes rental activity, whether it be of luxury homes and condominiums, to small starter homes for teachers, police officers, or low-income families. Although housing prices have dropped considerably, the promise of home ownership remains elusive due to increasingly cumbersome lender restrictions. Moreover, existing tenants have lost the benefit of their existing leases due to the recent wave of foreclosures. Therefore, low-to-middle income families will suffer under a strained reading ofHaddock. Amy Hoak, Housing Affordability: Rents in Florida, Homes More Affordable in Most Cities, MARKET WATCH (May 7, 2009).

Mark A. Rothenberg is a land use and planning attorney. He is in-house counsel to the Southern California Edison Company, and his prior experience includes having represented developers, property owners, and local governments in all manner of real estate and development-related issues in Florida and California. Mr. Rothenberg received his JD., magna cum laude, from the University of Miami School of Law, where he served on law review.

Kara L. Cannizzaro is a land use and planning attorney with Siemon & Larsen, P.A. Ms. Cannizzaro has represented developers, local governments, and property owners in various development and real estate matters. Ms. Cannizzaro received her J.D. from Florida State University, where she was a member of the Journal of Land Use and Environmental Law, as well as the Journal of Transnational Law and Policy.

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Who Qualifies for the Extended Credit?

• First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
• Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by two additional factors:

1. The price of the home.
2. The buyer’s income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009,  single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

For more information contact us.

AOL is reporting that Sarasota, Florida is the 2nd most undervalued cities in the United States:

Sarasota is a relatively upscale community on Florida’s west coast. “It’s a nice boating community, and they have got a lot of beautiful homes there,” says Jack McCabe of Florida-based McCabe Research & Consulting. After home prices plunged 44 percent from the first quarter of 2006 to the first quarter this year, the market presents would-be buyers with some attractive opportunities. IHS Global Insight considers the median home price in Sarasota — $141,000 — to be 28 percent undervalued.

 This is good news for buyers who are planning to buy a home in Sarasota.

We often hear from buyers that they are trying to time the bottom. But don´t wait too long. We are seeing that the better properties are again being sold within weeks or even days. Many investors are coming back to the Florida Real Estate market and buying well priced properties in good locations. There are still bargains out there – but remember that this buyer´s market won´t last forever!

If we can help you find a Sarasota home for sale give us a call at 941.866.1666 or use our Sarasota MLS search to find your next home.

The funds are part of the $482,236 in State Housing Initiatives Partnership (SHIP) funding from the Florida Housing Finance Corporation that the City received for the 2008-09 program year.

To qualify, the applicant must be earning up to 80% of the Area Median Income but the maximum annual income must not exceed the following limits:

Family size  

1 Person/$34,900
2 Persons/$39,900
3 Persons/$44,850
4 Persons/$49,850
5 Persons/$53,850
6 Persons/$57,850 
7 Persons/$61,800  
8 Persons/$65,800

The City will accept applications for the housing rehabilitation assistance program from Aug. 3-13. 

Applicants must complete a first-time homebuyer’s class and be approved for a mortgage prior to applying. Applications submitted after the deadline will not be considered. Down payment assistance will be awarded on a first-come, first-ready basis to persons owning homes within the City limits.

Source: www.cityofbradenton.com

Beginning July 1, those who quality for the federal $8,000 first-time homebuyers tax credit will be able to apply for downpayment assistance before they close on the purchase of their home, and then repay the amount borrowed when they get their tax refund. The program will operate through local county housing administrators, though details are still being worked out.
© FLORIDA ASSOCIATION OF REALTORS

Our beautiful area is definitely a great place to be all year round.  We admit it – we´re crazy about this region, from the blue-green Gulf and wild rivers to buzzling Sarasota Downtown  and a word-class cultural and restaurant scene.

Unlike many beach communities, things don´t come to a halt in the off season. Rather the off season allows locals to enjoy our serene white sandy beaches all to themselves.

There is plenty of activity all year round: boaters, golfers and sun-seekers all find happiness in the Bradenton/Sarasota region!

Wheather you have your eye on a condo on the island, a home on the golf course or an expansive rural home, the Bradenton/Sarasota offers lots of choices for all budgets and tastes.

From an investment standpoint, you may be nervous about the current housing market. But especially this market offers lots of opportunities for buyers. Low interest rates and a large market favor anybody who is looking to invest.

Take advantage of the buyer´s market by checking out the local real estate. The variety of homes makes sure thateveryone can find their personal paradise. Enjoy the lifestyle you deserve – make your vacation last a lifetime!

• The deduction is worth 10 percent of a home’s value up to $8,000, which means all homes worth more than $80,000 could qualify for the maximum amount.

• There is an income limit to qualify. A married couples’ modified adjusted gross income (MAGI) should be under $150,000 and single filers’ MAGI should be less than $75,000.

• Partial tax credits may be available for married couples with MAGI incomes over $150,000 but under $170,000, and single filers with incomes over $75,000 but under $95,000.

• If married couples file separately, they can both claim 5 percent of the home purchase ($4,000 each for a home over $80,000) on their tax returns.

• It’s a tax credit, not a deduction. That means the entire amount goes back to the first-time homebuyer unlike deductions, such as mortgage interest, that are subtracted from gross income before tax is calculated. If qualified for $8,000, the buyer gets $8,000, even if they would not owe that much in taxes otherwise.

• The tax credit applies to homes purchased between Jan. 1, 2009, and Dec. 1, 2009.

• The tax credit does not have to be paid back, providing the homebuyer keeps the property for at least 36 months and resides in the home.

• To qualify as a first-time homebuyer, the purchaser cannot have owned a home within the previous three-year period. However, ownership of a vacation home or rental home does not disqualify the buyer.

• If purchasing a new home, the effective date to receive the credit is the first day the homeowner actually lives in the house. If construction began in 2008, that buyer could still qualify. And if construction begins in 2009 but the owner does not take possession until 2010, the buyer would not qualify.

• The tax credit can be claimed on 2008 income tax forms even though the purchase took place in 2009. A buyer could close on a home the same day that President Obama signs it into law, fill out their income tax forms the next day, and receive the tax credit fairly quickly.

The tax credit is not a downpayment, but it could be used toward a downpayment if first-time homebuyers plan ahead. U.S. taxpayers have money withheld from every paycheck for income taxes. If they owe more tax than the amount deducted, they pay the IRS; if they owe less, they get a tax refund.

By anticipating at least an $8,000 refund in early 2010 when they file 2009 taxes, these buyers could cut down on their tax withholding this year and save the money toward a downpayment. There is one caveat, however: Should they not buy a home in the qualifying period, they would still owe the IRS the money, and reducing their withholding amount could result in a high bill at tax time.

Some good news for first-time homebuyers:

As part of the Housing and Economy Recovery Act of 2008, the IRS authorizes a deduction of up to $7,500 for qualified first-time homebuyers. The tax credit is part of a recently enacted legislation to help people recover from the recent mortgage crisis.

The tax credit is basically an interest-free government loan that must be repaid over a 15 year period. You have to start repaying the credit in the second year after the tax year that the home was purchased.

Tax Credit Rules

• The home must be purchased as primary residence.
• The tax credit is available for first-time homebuyers only. However, you could qualify if you´ve owned a home before, but not as your principal residence during the 3 years prior to the purchase.
• The credit is equal to 10% of the home purchase price, up to a limit of $7,500.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full credit.
• The home must be purchased on or after 04/09/08 and before 07/01/09.

If you are planning on buying your first home and need any assistance, please give us a call @ 941.866.1666. We will be glad to discuss any details.

Look at it again! It may finally be affordable!

Even if you have to sell your own home first – it is possible. If the price of your dream home dropped in the recent down market, it may be worth to price your own home aggressively, because you can make it up on the other end by making a great deal on your new home.

You just have to be a clever bargainer: put some pressure on the seller of your dream home by refering to similar homes in the neighborhood at lower prices. Check how long the home has been on the market. The longer it was on the market, the more likely the seller will be willing to negotiate.

If you need help with getting this information, just give us a call @ 941.866.1666. We have all the information you need.

No, no, don’t laugh. I’m serious. Of course, I don’t mean property that is overpriced or overvalued. The kind of real estate that is only available at these times and at these prices.  Realistic sellers, short sales and foreclosures mean opportunities for buyers.

Look ahead of the crowd

Today, you can find some great bargains on real estate in the Florida, if you know where to look. Look ahead now and you won’t have missed the boat like you did before. I mean these people from overseas saying, if we knew the market would go like this, we should have bought something here in 1995. The 2nd chance is just around the corner waiting.

Sure, the US Real Estate and mortgage market is desparate now. Have we already seen the bottom of the real estate market and the US-Dollar vs. the other important currencies of the world? I don’t believe so, but nobody knows for sure. Besides that election year is coming, what I know for sure is that the US Real Estate market is not Florida. Why?

Sail, surf and beaches! Period!

Espcially the Sarasota / Bradenton market was ahead of the rest when the prices began to skyrocket and it was ahead when they began to drop. So this is the market where you should starting looking now. Don’t wait to long and try to chase prices better catch them in advance.

More money to buy real estate

The falling dollar and the mortgage crisis make up a perfect storm that has left overseas investors in U.S. stocks and bonds facing unattractively low interest rates and unattractively low (or negative) returns on stocks. The dollar’s fall will cause them to lose money in their home currencies even if U.S. stocks hold steady.

An increasing number of overseas investors are joining the global search for alternatives.  The number one alternative is real estate.

 Do you think real estate is a smart investment now?

At some point, though, those same overseas investors will realize that U.S. real estate is a great hedge against what they fear most: an attack of runaway inflation in the United States. A physical asset such as real estate goes up in value when inflation soars. At some point, those overseas investors will notice that real estate in the U.S. is cheap enough that any recovery in the American economy will produce windfall profits.

And besides all profits, don’t forget: Surf, sail and beaches and this can be the source for: More profits…

Axel Weiss, MBA
Lic. Real Estate Pro, Lic. Mortgage Broker
with material from Matt Augustyniak, Horizon RealtyBradenton, Florida