Governor Perdue has signed HB 261, creating a Georgia income tax credit up for the purchase of an eligible single-family residence. Although we are happy that the tax credit made it to the signing table, there were a few changes from the original bill that was passed by the Senate.
The credit is limited to eligible purchases made between June 1, 2009 and November 30, 2009. If you have already closed on your home purchase this year, you will not receive the credit. The credit can be claimed only one time per taxpayer.
The final version of the bill contains an amendment to clarify condominiums and residences occupied at the time of sale are eligible for the credit. In addition, eligible single family residences include :
- new single family residences
- previously occupied residences that were for sale prior to the May 11, 2009 and are still for sale after May 11, 2009
- owner-occupied residences with respect to which the owner's acquisition debt is in default on or before March 1, 2009 (meaning pre-foreclosure properties)
-residences where a foreclosure has taken place and are owned by the mortgagor or the mortgagor's agent (properties owned by the bank)
There has been little debate about the need to stimulate the housing market. However, state budget deficits left approval of HB 261 in serious trouble. It was finally decided to reduce the overall maximum benefit of the tax credit to $1,800 or 1.2 % of the purchase price (whichever is less) spread over three years so that the overall impact to the state was reduced by allowing the credit to be claimed over three years, while continuing to provide a significant benefit to potential homebuyers.
It is important to note that this is not just for First Time Home Buyers. Anyone purchasing a home may be eligible for this tax credit.
It is also important to note that this is not in lieu of the Federal Tax Credit of $8000 that purchasers may also be eligible to receive.
For specific questions about the tax credits and what it means to you, contact your tax professional.
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