Home Buyer Tax Credit is Powerful Stimulus to Home Sales…Should you take advantage of the Government Offer?
The Stimulus Program extended as of December 1, 2009 into this Spring is a powerful incentive to purchasing a home…good whether you are purchasing your first home or actually for any home under $800,000! If you have never owned a home, need more space than your current home provides, want to downsize or reduce your payments or even want to help your children get a leg up in the home market…NOW IS THE TIME TO ACT.
Why? It isn’t just a tax credit…it means that even if you don’t owe any taxes, you will receive the full credit. Other reasons include:
• the availability of historically low interest rates,
• loans that require as little as 3.5% down payment,
• ability to use the tax credit for part of your money down and
• reduced home prices.
Details for First Time Purchasers
First Time Buyers will receive up to $8,000 ($4,000 if married and filing separately). The credit cannot exceed 10% or the purchase price of the home. When Congress approved the extension of the incentive, they increased the income limits to $125,000 if single and $225,000 if married. If you earn as much as $20,000 more than that, there is a phase out of the benefit.
You are considered a first time homebuyer if you haven’t owned a principal residence in the United States in the last three years.
The contract must be negotiated and in effect on April 30, 2010 and closed by June 30, 2010. Some additional details include: purchases by dependents are ineligible. Surprisingly, if you co-sign a mortgage to help your non-dependent child buy his of her first home, your eligibility status does not affect your child’s ability to qualify for the credit. The tax credit money never has to be repaid as long as you live in your home for at least three years. There are programs that will advance the credit to help with your down payment. The home price cannot exceed $800,000.
You can claim the credit when you file your 2009 or 2010 tax returns, so it makes sense to consult your tax preparer to determine which alternative may benefit you most. Purchasers must attach documentation of the purchase to their tax return in order to prevent fraud.
Details for the Repeat Homeowners Credit
Are you a current or former homeowner who is considering a home that better meets your needs?
The amount of the credit is $6,500. Current homeowners must have used the home sold, or being sold, as a principal residence consecutively for 5 of the previous 8 years. Only a home purchased after December 1, 2009 qualifies for the credit. The credit amounts to 10% of the purchase price, up to the $6,500 allowed.
If you currently own your principal residence, you don’t have to sell it – but you do have to move into the home you buy. Your home can cost more or less than your previous home; it doesn’t matter.
The income limits of $125,000 if single and $225,000 if married are the same as for the first time buyer credit. You can also get some credit payout, even if you earn as much as $20,000 more.
Again the contract must be negotiated by April 20, 2010 and closed by June 20, 2010 and need not be repaid, if you live in the new home for at least three years.
Little known facts include: even if you don’t owe taxes, you can receive the full credit. The tax credit can be claimed on either your 2009 or 2010 filing of your tax return.
How can the Cincinnati Team Help?
Saralou Durham and Mary Elsener have over 30 years of experience in the real estate business. It is important to us to find a home that meets your needs and goals, if the time is right for your purchase. You can count on us to be honest about the process, to educate you on conditions affecting your sale and to make sure you understand the buying and selling process. Call Saralou (513-646-4819) or Mary (513-646-4819) for help getting your tax credit.
The time to act is now, before this tax credit stimulus program is G-O-N-E in 2010. It is unlikely to be extended again as proof mounts that the economy is improving.