Thursday, January 7, 2010

It’s a perfect time to make a great investment!

In November, Congress extended the tax credit for first time home buyers.

Who is eligible to claim the $8,000 tax credit?
First-time home buyers purchasing any kind of home—new or resale— to be used as a principal residence costing $800,000 or less are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009, be under contract on or before April 30, 2010 and close before June 30, 2010.

What is the definition of a first-time home buyer?
The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

Are there any income limits for claiming the tax credit?
The income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. Single or head-of-household taxpayers with income between $125,000-$145,000 and joint filers between $225,000-$245,000 qualify for reduced credits.

Is this a loan?
No, the tax credit does not need to be repaid as long as you continue to own the home for a minimum of 3 years.

There is a special deadline for people serving in the Military: The deadline has been extended until June 30, 2011 for members of military who have served outside the United States for at least 90 days between January 1, 2009 and May 1, 2010.

If you are a current homeowner, you don’t have to be left out!

As part of the new legislation, there is a tax credit of up to $6500 for ‘move-up’ buyers. Those are buyers who have owned their current home for at least 5 of the 8 previous years. The same restrictions apply regarding the date that the transaction must be completed by.

With mortgage rates and home prices still low, there's never been a better time to buy a house.