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Begin your journey to home ownership -
With the help of "Uncle Sam" and Patterson-Schwartz Real Estate!
Have you been thinking about buying but have been unsure of the right time? With the recent passing of the Housing Bill by Congress coupled with the changes in mortgage lending, now may be your ideal window of opportunity to buy the home of your dreams. In addition to the $7500 tax credit, you have access to an abundant supply of homes from which to choose and affordable low interest financing too. Kind of the "Perfect Storm"! But don't wait too long - to earn the tax credit for 2008 you must settle on your new home by December 31, 2008. Contact me to learn more and start your journey to home ownership.
What is the First Time Home Buyer Credit?
On July 30, 2008, President Bush signed a major housing bill (H.R. 3221) into law. The law created a new, temporary tax credit equal to ten percent of the qualified home purchase price, with a maximum credit of $7500. The credit is essentially an interest free loan. Home buyers repay the credit to the government, without interest, over 15 years, in equal installments or when they sell the house.
Who is eligible?
A first time home buyer is defined as a buyer who is a U.S. citizen who files a tax return and who has not owned a principal residence in the previous 3 years. The eligible property includes any single family home that can be used as a principal residence including a condominium. To qualify the buyer must close on the sale of the home between April 9, 2008 and June 30, 2009
Are there income limits?
Yes. Individuals whose Form 1040 filing status is Single (or Head of Household) are eligible for the full credit if their income is no more than $75,000. Individuals who file a Joint return may have income of no more than $150,000. A partial credit is available for income above the limits and is completely phased out when income reaches $95,000 for individuals ($170,000 joint return).
When will I receive the credit?
The credit reduces your income tax liability for the year in which you purchase the home. To receive the tax credit for the 2008 tax year, you need to purchase and close by December 31, 2008. First time buyers who close in the first half of 2009 will receive the tax credit when they file their 2009 tax return in 2010. The credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. In such instances, the taxpayer will receive a refund check from the government.
How is the tax credit repaid?
The credit amount is repaid in increments of 6.67% of the credit over 15 years. For individuals who take the full $7500 credit, the repayment will be about $500 per year. Individuals who claim a credit of less than $7500 will pay 6.67% of their credit each year. There is no interest applied to the outstanding balance. Repayment is set to begin two years after the credit is claimed.
Now that you have the knowledge, take the next step to home ownership - call or email me now for your personal consultation about the buying process.
Not available for those who finance their home purchase under a mortgage revenue bond program, such as a tax-exempt bond related financing program offered through a state housing authority.
Consult a tax advisor about your individual situation. This information is not intended to provide legal or tax advice nor should it be relied on as such. Please seek the advice of your own legal or tax professional.
