1st Time Buyers
Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers. Here is more information about how the 2009-2010 Home Buyer Tax Credit can help prospective home buyers become part of the American dream. Latest news:
It's official! President Obama has signed the Bill that extends the tax credit for first-time home-buyers into the first half of 2010. In addition, the extension also opens up opportunities for others who are not buying a home for the first time. To help you understand what the new tax credit details mean to you, I have put together a concise overview of the new tax credit deadline, income caps, and more.....
Tax Credit for Home-buyers
First-Time Home-buyers: First-Time home-buyers (people who have not owned a home within the last 3 years) may be eligible for the tax credit. The credit is 10% fo the purchase price of the home, with a maximum available credit of $8000.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6500. for qualified purchasers who have owned and occupied a primary residence for a period of 5 consecutive years during the last 8 years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
New Deadlines:
In order to qualify for the credit, all contracts must to be in effect no later than April 30th, 2010 and close no later than June 30th, 2010.
Tax Credit vs. Tax Deduction:
It is important to remember that the tax credit is just that.....a tax credit. The benefit of a tax credit is that it is a dollar-for-dollar tax reduction, rather than a reduction in tax liability that would save you only approximately $1000. to $1500. So, if a first-time home-buyer were to owe $8000. in income taxes and would qualify for a tax credit of $8000., he/she would owe nothing.
Better still, the tax credit is refundable, which means the home-buyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time home-buyer is eligible for a tax credit of $8000. but is liable for $4000. in income tax, he/she may receive a check for the remaining $4000.!
Higher Income Caps:
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are not eligible.
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filiers who earn $245,000 and above are not eligible.
Maximum Purchase Price:
Qualifying buyers may purchase a property within a maximum sale price of $800,000.
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Remember, the new tax credit program includes a number of details and qualifications. For more information or answers to specific questions, please call or email me today.
Debra Anderson, CSC, ePRO
Executive Realty Group
Debi@DebiAnderson.com
630-235-0139
