Why buy NOW? Current market conditions overwhelmingly favor first time homebuyers. If you’ve never owned a home, or haven’t owned one in the last three years, you have a once in a lifetime opportunity NOW! The Recovery Act giving you up to $8,000 will expire December 1, 2009. The sooner you act; the better.
• Up to $8,000 tax credit back
• The best home values in years
• Lowest interest rate in years
• With the right financing and a well written contract, you may be into a house and actually net cash back into your pocket by year end
The first-time homebuyer credit is a new tax credit included in the Housing and Economic Recovery Act of 2008. The credit was expanded in 2009 for homes purchased in 2009, increasing the amount of the credit and eliminating the requirement to repay the credit, unless the home ceases to be your principal residence within the 36-month period beginning on the purchase date.
The credit is 10 percent of the purchase price of the home, with a maximum available credit of $8,000 for either a single taxpayer or a married couple filing a joint return, but only half of that amount for married persons filing separate returns. For a home that you construct, the purchase date is considered to be the first date you occupy the home. Taxpayers who owned a principal residence at any time during the three years prior to the date of purchase are not eligible for the credit. This means that you can qualify for the credit if you have not owned a home in the three years prior to a purchase.
Vacation homes and rental property do not qualify for this credit. The credit is reduced or eliminated for higher-income taxpayers. The credit is phased out based on your modified adjusted gross income (MAGI). For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000.
If any of the following describe you, you cannot take the credit, even if you buy a new home:
• Your income exceeds the phase-out range.
• You buy your home from a close relative.
• You do not use the home as your principal residence.
• You sell your home before the end of the year.
• You are a nonresident alien.
You may not claim the credit in anticipation of a purchase that has yet to happen, so be sure to complete your purchase before December 1, 2009.
Generally, there is no requirement to pay back the credit for a principal residence purchased in 2009. The obligation to repay the credit on a home purchased in 2009 arises only if the home ceases to be your principal residence within 36 months from the date of purchase.
Please see your attorney or accountant for full details.
Information provided by Century 21 Shaw Realty |