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| March 2009 |
Phone: (828) 685-8602 Fax: (828) 685-9627 2968 Chimney Rock Road Hendersonville, NC 28792 Website: www.apple-country.com Email: info@apple-country.com |
Market and Trends$8000.00 Tax Credit!
The new stimulus package contains a bill which provides for an $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser. Please be sure you check with your tax preparer to determine your eligibility and to obtain details but here are the rules as we understand them:
1. The Tax Credit is for home buyers (either spouse if filing jointly) who have NOT owned a principle residence during the three-year period prior to the purchase. Ownership of vacation property or rental property does not disqualify home buyers from this program.
This may be the best time in years for all first time home buyers to seriously look at purchasing. With lots of inventory, low interest rates and now an $8,000.00 tax credit there may never be a better time for first-time home buyers to purchase. 2. The maximum credit is $8,000 or 10% of the home purchase, whichever is less. 3. The credit is available for homes purchased on or after January 1, 2009 and before December 31, 2009. 4. To qualify for the full tax credit, married couples' modified adjusted gross income (MAGI) should be under $150,000 and single filers' MAGI should be less than $75,000. Partial tax credits may be available for married couples with MAGI incomes of over $150,000 but under $170,000 and single filers with incomes over $75,000 but under $95,000. If married couples who qualify for the first-time tax credit file separately, they would both claim 5% of the home purchase or $4,000 each (whichever is less) on their tax returns. 5. Home buyers who qualify for this program, but who do not intend to purchase a home till the end of 2009, may elect to alter their tax withholdings (up to the amount of the of the tax credit) in order to save up money for a down payment. However, if the purchase of the home does not occur, the taxes must be repaid to the IRS. 6. There is no recapture or repayment clause IF the home is owned for at least 36 months. 7. The effective date of purchase for new construction (even if buyer owns title to the lot) is the date the owner first occupies the house. So even if construction began in 2008, as long as the home and buyers qualify for the tax credit, they will be eligible if they take possession any time during 2009. However, new construction bought from the builder is only eligible if the settlement date (closing) takes place between January 1, 2009 and December 31, 2009. 8. The law allows taxpayers to elect to treat qualified 2009 purchases as a 2008 purchase so that they can receive the tax credit on their 2008 tax returns. 9. The full amount of the eligible tax credit is refunded to the buyer, regardless of whether the buyer has paid an equivalent amount in taxes. Also, included in the new stimulus package is a tax credit for homeowners installing energy-efficient windows, furnaces and air conditioners. Homeowners may be eligible for a tax credit to cover 30 percent of the costs, up to a total of $1,500.00. |
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2968 Chimney Rock Road | Hendersonville, NC 28792