It’s been a while since I posted but rest assured that I am back and ready to post regularly again. I have switched brokers and now work with Keller Williams of Central PA East. That change has kept me very busy but everything seems to be settling in now so a return to blogging is welcomed.
How many of you have questions on the home buyer tax credits that are available?
It has come to my attention that plenty of Realtors don’t even know the facts so make sure you know what is going on or make sure you Realtor knows.
First Time Home Buyers – $8,000:
If you have NOT owned a home in the past 3 years you are eligible for this tax credit. It is not just for ‘First Time’ buyers as many think. If you owned a home and sold it 3 or more years ago you are eligible for this credit.
Many people don’t know that portion of it they just assume that they aren’t eligible because they owned at one time but that is not the case.
Repeat Home Buyers – $6,500:
If you have owned your home (your primary residence) for 5 of the past 8 years you are eligible for up to $6,500. If you owned a home and rented it out you are not eligible for this…you HAVE TO HAVE LIVED in the home for 5 of the last 8 years.
This is another confusing point for some people. Many people are under the impression that only first time buyers get the credit because that is how it was set up last fall. But it HAS changed and does include people who have owned homes recently.
Selling your home DOES NOT GET YOU THE CREDIT…only buying the home. I was talking to someone the other day who was under the impression that if you sold your home and settled before June 30th then they got $6,500 in tax credits…NO YOU DON’T!!
You only get the tax credit if you BUY a home.
Now you might have to sell a home before you can buy but you still have to buy or you don’t get the credit.
Time Frame – 4/30/10 and 6/30/10:
This is probably where most of the confusion comes into play. If you are looking to take advantage of this tax credit you HAVE to agree on a contract before April 30th. All signatures need to be made and all things agreed on BEFORE the 30th of April. Inspections and things like that can happen after that but the contract needs to be agreed upon.
AND you have to settle before June 30th. That gives you 2 months to schedule and have settlement in order to get your tax credit. That is plenty of time but there will surely be plenty of settlements in the last week or so of June so make sure you get yours scheduled ASAP.
Limitations:
There are some limitations for these credits. First lets say this…you are only entitled to 10% of the value of the home. If you buy a home for $70,000 and are a first time buyer you will only get $7,000 not $8,000.
Income….if you are single you can make up to $125,000 and still be eligible for the tax credit. A married couple can make up to $225,000 and still get the full credits.
Home Value….homes up to $800,000 are eligible. If you are looking at a 1 million dollar property then you will not be eligible for the credit.
Have to Stay for 3 Years….if you cease to use the property as your primary residence OR sell the property in the 3 years following settlement you WILL HAVE TO PAY BACK THE CREDIT!! Keep this fact in mind, because if you sell you could owe as much as $8,000 to the government….you do NOT want that bill on your desk.
IF YOU WOULD LIKE MORE INFORMATION ON THESE PROGRAMS:
