SanAntonioism: Home Buyer Tax Credits

On November 7, 2009 President Obama signed into law the extension of the First Time Home Buyer Tax Credit and expansion of the credit to include previous and/or current home owners.

According to statistics from the National Association of REALTORS®(NAR), 47% of home buyers last year were first time home buyers. While some think many of these buyers would have bought homes with or without the tax credit, NAR statistics show an increase of first time buyers over previous years. Personally, I had a number of first time buyers last year and this year 70% of my transactions involved first time buyers! Thank you, Congress, for this particular economic stimulus incentive.

What exactly is a Tax Credit? Well, it's a lot better than a tax deduction - that's for sure. Receiving a tax credit means that your tax bill owed to the IRS is reduced by the amount of the tax credit you are eligible to receive AND - the really great part - IF YOU DON'T OWN MONEY, THE IRS PAYS YOU THE AMOUNT OF THE TAX CREDIT!!! So let's say you owe $2,000 in taxes when you prepare your return and you qualify for the full $8,000 tax credit. Then the IRS will deduct the $2,000 you owe from the $8,000 credit they owe you and they'll send you the difference. If they owe you a refund already, they'll add that refund to the amount of your tax credit and send you the whole kit and kaboodle!

What a deal - the government is paying you to buy a house!

Here are the main things to know:

First-time Buyer:

up to $8,000 credit ($4,000 married filing separately) or 10% of purchase price
may not have had in interest in a principal residence for 3 years
effective date of Jan. 1, 2009 through April 1, 2010 (binding contact in place by April 1, 2010 with closing taking place by July 1, 2010)
income limit of $75,000 single or $150,000 married raised to $125,000 single and $225,000 married
limitation on cost of house now set at $800,000

Current Homeowner

up to $6,500 credit ($3,250 married filing separately) or 10% of purchase price
must have lived in previous residence 5 consecutive years out of the previous 8 years

do not have to own a house and be selling it at the time of purchasing a new one

Check this link for a comparison of the old rules and the new rules plus a lot more important information as found on the NAR website:

http://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit

Want to know more? Send me an email and let's talk about

how you can participate! Email me - Lynn@LynnKnapik.com