In an effort to help motivate homebuyers and to get the economy back on track, Congress has recently enacted legislation to provide a tax credit to buyers. Although the new tax credit is restricted to those who are purchasing a home for the first time and is only valid on purchases made between January 1, 2009 and December 1, 2009, the new credit can reward buyers with up to $8,000 in credit. In addition, unlike previous tax credits that have been provided to homebuyers, the new credit does not need to be repaid over time.
Qualifying for the tax credit requires homebuyers to meet certain criteria. According to the legislation, they must be a first-time homebuyer, which has been defined as someone who has not been the owner of a principal residence for at least three years prior to the purchase. In addition, qualifying for the tax credit is subject to income restrictions. Single applicants must have made no more than $75,000 for the previous tax year, and married applicants no more than $150,000.
The actual amount of the credit will depend on the purchase price of the home, whereby buyers will receive 10% of the price as tax credit. The credit has an $8,000 ceiling, meaning that for any homes that cost more than $80,000, the 10% rule will no longer be in effect and instead they can receive $8,000 total.
Many properties are eligible for the credit, and according to the new tax law, any property that can be used as a primary residence is allowable. Examples include: single-family houses, condominiums, town-houses, manufactured or mobile homes, and houseboats.
Also eligible for the tax credit are newly constructed homes. When purchased from a builder, the settlement date needs to be between 1/1/09 and 12/1/09. On the other hand, buyers who are constructing a home on land they've previously owned can also receive the credit, as long as they've occupied the home for the first time after 1/1/09 and before 12/1/09.
Although the new legislation is different from previous legislation because the credit does not need to be repaid, it is important to note that the homebuyer must utilize the property as his or her primary residence for at least three years after making the purchase. Otherwise, it is possible that the credit will need to be repaid.
Qualifying for the tax credit requires homebuyers to meet certain criteria. According to the legislation, they must be a first-time homebuyer, which has been defined as someone who has not been the owner of a principal residence for at least three years prior to the purchase. In addition, qualifying for the tax credit is subject to income restrictions. Single applicants must have made no more than $75,000 for the previous tax year, and married applicants no more than $150,000.
The actual amount of the credit will depend on the purchase price of the home, whereby buyers will receive 10% of the price as tax credit. The credit has an $8,000 ceiling, meaning that for any homes that cost more than $80,000, the 10% rule will no longer be in effect and instead they can receive $8,000 total.
Many properties are eligible for the credit, and according to the new tax law, any property that can be used as a primary residence is allowable. Examples include: single-family houses, condominiums, town-houses, manufactured or mobile homes, and houseboats.
Also eligible for the tax credit are newly constructed homes. When purchased from a builder, the settlement date needs to be between 1/1/09 and 12/1/09. On the other hand, buyers who are constructing a home on land they've previously owned can also receive the credit, as long as they've occupied the home for the first time after 1/1/09 and before 12/1/09.
Although the new legislation is different from previous legislation because the credit does not need to be repaid, it is important to note that the homebuyer must utilize the property as his or her primary residence for at least three years after making the purchase. Otherwise, it is possible that the credit will need to be repaid.
About the Author:
Learn more about the real estate tax credit and view listings for Lake Austin Bee Cave Houses.
No comments:
Post a Comment