Take Advantage of the Tax Credit
The home buyer tax credit was created in 2008; the home buyer tax credit has evolved from a $7,500 credit, which had to be repaid by the home buyers over the course of 15 years, to an $8,000 tax credit with no repayment required in 2009. The home buyer tax credit of $8,000 and current homeowners credit of $6,500 has been extended to April 30th 2010. This is good news and everyone that qualifies for these two credits should take advantage of them before it's too late. April 30th 2010 is just around the corner only two months away. To help everyone better understand the extended home buyer tax credit here are some of the main points of the changes. First Time Home Buyers who purchase homes between November 7, 2009 and April 30, 2010 qualify for the credit. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
To qualify as a First Time Home Buyer the purchaser may not have owned a residence during the prior three years. There is an $800,000 limitation on the cost of the house and of course you have to be at least 18 years old on the date of the purchase. For a married couple, only one spouse must meet this age requirement and dependents are not eligible to claim the credit. For current homeowners purchasing a home during the same time period they are also eligible for a tax credit. As long as the home being sold or vacated was their principal resident for five straight years within the last eight. The existing home does not need to be sold; however one must occupy the new home as a principal residence and do so for three years or risk recapture of the tax credit. Also, the new home does not need to cost more than the old home despite the concept that it is directed at move up buyers. The maximum allowable credit for first time buyers is $8,000 or 10% of the sales price whichever is less of course and for current homeowners its $6,500 or 10% of the sales price. Under the extended home buyer tax credit, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the maximum credit. The credit decreases for single buyers who earn between $125,000 and $145,000 and between $225,000 and $245,000 for home buyers filing jointly. Home buyers earning more than $145,000 for singles and over $245,000 for couples are not eligible for the credit. You need to understand that the buyer does not need to repay the tax credit if he or she occupies the home for three years or more. If the property is sold during the three year period the full amount of the credit will be recouped on the sale. Finally, as an anti-fraud measure, purchasers must attach documentation of purchase to his/her tax return claiming the credit.
Take advantage of the help the government is giving to First Time Home Buyers and Current Homeowners. Let us work for you and do this process for you. The Jerry Pinkas Real Estate Team works for you and we are waiting on your call. Do not hesitate call us at 843-839-9870 today!