Florida Tax Credit for First-Time Homebuyers

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Floridians looking to buy their first home are eligible for the Florida Housing Mortgage Credit Certificate (MCC) program. MCC offers a dollar-for-dollar tax credit for first-time homebuyers on up to 50 percent of their mortgage interest. You are eligible for this tax credit annually, as long as your first home remains your primary residence.

The tax credit amount you will receive depends on the percentage of interest that you pay on your first mortgage loan. The percentage of interest that you can claim on your tax return is your credit rate. Florida Housing is the agency that administers the tax credit and determines your credit rate, which usually falls between 10% to 30%. If you are issued a credit rate of 20%, there is no maximum for the tax credit. However, for all other credit rates, the tax credit is capped at $2000.

The credit rate percentage is then used to calculate your tax credit using these formulas:

Loan amount x interest rate = annual interest

Annual interest x credit rate  = tax credit

Here’s an example to break it down:

Loan: $250,000

Interest rate: 5.5%

Credit rate: 20%

$250,000 x 0.055 = $13,750

$13,750 x  0.2 =$2750

In this scenario, a first-time homebuyer would receive an annual tax credit of $2750/year.

Eligibility:

Read on to see if you meet the criteria for the Florida Housing MCC tax credit:

  • Be a first-time homebuyer
  • Have sufficient tax liability to benefit from the tax credit
  • Attend a pre-home purchase education course
  • Don’t exceed the maximum income limit requirement
  • Your purchase price can’t exceed your local county limit

Work with your Shop Your Own Mortgage Expert and your CPA to find out if you meet the limits for income and purchase price in your county.

Helpful Tips:
  • The earlier in the year you start paying for your mortgage, the greater your tax credit will be for the first year.
  • You can use the remainder of your tax credit over the course of three years if you were unable to use all of it in the first year of your mortgage.
  • The rest of your mortgage interest is claimable as a tax deduction.