Ryan's Blog

Time is Running Out!

If someone told you they would be willing to give you free money most people would just laugh and move on. Well in the case of the homebuyer tax credit, it really is free money. I am sure most of you have heard about it. Currently we are working with several first time home buyers who are eligible for the credit but are unsure about the details. I wanted to include the basic who, what, when and where questions to clear some of the confusion up.

Who Qualifies?

First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

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

Which Properties Are Eligible?

The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?

The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer’s income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can they Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

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 the three-year period, the credit will be recouped on the sale.

Right now is a great time to purchase a home. Inventory is high, rates are low, and the $8000 tax credit is icing on the cake. BUT, time is running out. The credit runs out December 1^st, 2009. Closings usually take 30 days and the purchase must be closed by December 1^st, 2009. If we can answer any questions regarding the tax credit or anything else, please feel free to give us a call. Don’t let this wonderful opportunity pass you by!