5 Ways First-Time Buyers Could Miss Out On This Year’s Tax Credit
June 11th, 2009 categories: Buyers, Real Estate News
As a leader in real estate, I am repeatedly asked specific questions about today’s market, especially in today’s economy. In an effort to provide more information to my community, I am sending you this Top 5 Real Estate Social Networking System “e-article,” in which I provide useful real estate information to my real estate networks. If you find the enclosed information beneficial to your family and friends, I encourage you to forward it to your “social network” as well.
5 Ways First-Time Buyers Could Miss Out On This Year’s Tax Credit:
The 2009 First-Time Home Buyers Tax Credit passed by Congress this year just might be the best financial opportunity available to qualified home buyers in a generation. The new credit is retroactive to January 1, 2009. Unlike the 2008 package, this is not a loan. Eligible first-time buyers receive an $8,000 tax credit from Uncle Sam that does not need to be paid back.
Sweetening the Pot, the law states that a first-time buyer is not necessarily a first-time buyer; the tax credit is available to any buyer who has not owned a home for the past three years. But the opportunity comes with some caveats. Here are five ways you could potentially miss out on this golden opportunity:
- Miss the buying deadline -The law states a home must be purchased between January 1 and November 30 of this year. But that means the transaction must close – not simply be in progress-before December 1.
- Delay on new construction -Because you must actually close on a home by November 30, 2009, you need to be careful about new construction estimates. If you want to buy a newly-built home, you should buy one that is either already completed or is about to be completed. New construction buyers must occupy the home by the deadline date.
- Misunderstand your eligibility – The right to use the tax credit is gradually phased out as adjusted gross income (AGI) rises from $75,000 to $95,000 on a single return or $150,000 to $170,000 on a joint return. If unsure of your eligibility, check with your tax advisor.
- Fail to plan ahead - There is an exception to the no-pay-back rule: You do have to repay the $8,000 if you sell the house within three years of the time you buy it. The home must be your principal residence and there is a recapture provision if you move out or sell before three years.
- Muss the boat for no good reason – Inertia…fear of rocking the boat…just-too-busy syndrome. Take advantage of today’s buyer’s market and talk to a real estate professional – Call me! and find out if and how the tax credit applies to your particular situation. Time is running out to take advantage of this financial incentive.
As a Member of the Top 5 in Real Estate Network, I am committed to providing the most up-to-date information on the details surrounding the First-Time Home Buyers Tax Credit. Please email me at Kathy@kathyvilla.com with any questions you may have and please forward this article to any family and friends who may qualify for this great opportunity!
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