Buying a home in Elkhart Indiana just got easier, thanks to the American Recovery and Reinvestment Act of 2009. The House and Senate passed this new bill on Friday, February 13, 2009 and it was signed into law by President Obama on February 16, 2009. Here is what it means to you...
An $8,000 tax credit (NOT a loan) is now available to many homebuyers. The quick facts are:
- Homebuyer must be a first time homebuyer OR have not owned a home for the past 3 years.
- Purchase must be for a principle residence (no investment homes)
- Homes must be purchased on or after January 1, 2009
- Does not require repayment as long as homebuyer stays in the home at least 3 years
- Applies towards single family detached homes, condos, and townhomes.
- Income cannot be greater than $75,000 annually for a single buyer, or $150,000 for a married couple.
- Credit is for $8,000 or 10% of purchase price, whichever is less.
- The credit is only available for a limited time.
What does a tax credit mean?
The credit reduces your tax liability, that is, the amount of taxes you are required to pay. Depending on your tax withholdings, you could get a bigger refund or owe less in taxes when you file. For example:
If your total tax bill is $5000, you've withheld $4,000 throught the year, and you qualify for the $8,000 tax credit, this is how your tax return might look:
$4,000 paid
-$5,000 owed
Owes $1,000
Claims $8,000 tax credit
Refund of $7,000
In this case, the new homeowner would receive a check of $7,000 from the IRS after filing. Elkhart, this is a perfect time to buy...Call your local Elkhart Indiana Real Estate Expert Evelyn Johnston with Prudential One Realty at 574-304-7148 to explore all your options.
Disclaimer: I am not a tax expert and I recommend you speak with one to see how this affects you and your taxes.
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