This is the brand new tax credit that passed this week, I’m just learning the details and will update as news comes in, so stay posted. I am very excited about this credit because it will benefit so many people here in our smaller market.
1. Up to Eight Thousand Dollars For New Buyers: This credit is equivalent to 10 percent of the purchase price of the home–although it’s capped at $8,000–and applies only to first-time home buyers and principal residences. And another piece of good news, this one does not have to be repaid.
2. What is a “first time home buyer” really?: For the purpose of this legislation, a “first-time home buyer” is someone who hasn’t owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.) That means if you’ve owned a vacation home–but not a principal residence–within the past three years, you would still qualify for the credit.
3. How long will it last?: This is for the 2009 calendar year. Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit. So, now is a great time to buy a home and with the low interest rates it’s a great investment.
4. What are the income limits?: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, $150,000 for married couples. Those earning more than these limits may be eligible for reduced credits.
5. What else?: Because the tax credit is “refundable,” qualified buyers can take advantage of it even if they don’t have much tax liability.
6. Do I have to pay it back?: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)