Many of you may have heard that President Obama signed the much anticipated $787 Billion bill into law. As a Realtor, the issue that was important to me was the 1st time Home Buyer tax credit, previously up to $7500 for 1st time home buyers. I had my figers crossed for an increase in the tax credit and possibly no repayment requirement.
GREAT NEWS!!! Obama gave me both: The tax credit has now been increased to $8,000 or 10% of purchase price of home. (whichever is less) and now buyers will not be required to pay back the loan if the home is not sold within the next 3 years!
Highlights of the stimulus plan include $6.6 billion to repeal a requirement that a $8,000 first-time home buyer tax credit be paid back over time for homes purchased from Jan. 1 2009 to Nov. 30 2009, unless the home is sold within three years! This means as long as you don’t sell your house within the next 3 years, you will not have to pay this credit back!
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This tax credit along with historically low interest rates, has helped increase interest in home ownership. Sounds great, right? Of course…but let the buyer beware! This, like any other tax credit includes many eligibility requirements. Don’t miss out on this exciting oppertunity by being misinformed.
*Please, don’t let the name fool you! First time Home buyer is defined as someone who has not owned a home in the last three years. If married, this included purchaser and spouse.
*The actual tax credit is 10% of the cost of the home, not to exceed $8,000.00.
*Condos, co-ops or single family homes may all be eligible for this credit, provided they are to be used as the purchasers primary residence.
*Remember, this tax credit is not for everyone, there are income limits. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000, respectively).
*Time is of the essense! This credit will only be available for a limited time. Purchases must be made between January 1, 2008 and November 30, 2009.
*This is NOT free money from the government! Home buyers will be required to repay the credit, without interest, over 15 years (6.67 of credit per year) if they sell their home within 3 years (if there is sufficient capital gain from the sale.)
Homebuying is one of the biggest financial decisions a person makes in their lifetime. Take the time to educate yourself on your local market, credit worthiness and finance options. Use a Realtor to guide you, their services are usually paid for from the seller’s portion of the sale, so their expertise is absolutely free! Why do this on your own? Trust a trained professional…ask me how I can help.
kimjohnson@watsonrealtycorp.com
ARE YOU A FIRST TIME HOMEBUYER WITH QUESTIONS?
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Resource information provided by National Association of Realtors & H.R. 3221 Housing and Economic Recovery Act of 2008:
http://www.realtor.org/GAPublic.nsf/files/chart_homebuyer_tax_credit_.pdf/$FILE/chart_homebuyer_tax_credit_.pdf
