newcomer information
You may qualify for the
Housing Stimulus bill:
$8,000 home buyer tax credit
Housing Stimulus bill:
$8,000 home buyer tax credit
The $789 billion economic stimulus package contains a key housing stimulus bill
designed to help first time home buyers in order to revive the US housing
market. The Home Buyer Tax rebate and New Car Incentives are one of the most
important incentives offered by the Government in 2009 Stimulus Package. If you
are a first time home buyer planning to purchase a home in 2010, this housing
stimulus can help you provide a refundable tax credit of 8000 USD.
How does $8,000 home
buyer tax credit work?
In order to understand the details of the housing stimulus bill or $8,000 home
buyer tax credit (also called as $8,000 housing tax credit) as a first time
home buyer you need to understand the following six important points.
1. What is the definition of First time home buyer? -The law defines “First time home buyer” as a home buyer who has not owned a principal residence for the last three
years. For married tax payers, both you and your spouse must be 'first time
home buyers’ in order to qualify for the housing tax credit. For unmarried joint purchases,
either of the qualifying partner may be a “first time homebuyer”. In this case the $8,000 housing tax credit can be allocated to any of the
partners. Read more about $8,000 home buyer tax credit for married people. For
unmarried joint purchases read my post on $8,000 home buyer tax credit for
unmarried joint purchases. Note the if you have bought a home 3 years ago and
have rented it since then, then it does not count as principal residence and
you may still be eligible for the $8,000 first time home buyer stimulus. Both
rental property and vacation homes do not count as principal residence.
Moreover, if the new home you are purchasing is a mobile home or condo, and it
is going to be your principal residence, you still qualify for the home buyer
tax credit. Even building a home on a land (as opposed to purchasing a
ready-made house) qualifies for the $8,000 housing tax credit. Even non
resident aliens who are not U.S. citizens may qualify for this tax credit.
2.Dates of home purchase - Offer expires 4-30-10. If buyer enters into binding contract by this date,
buyer has until 6-30-10 to settle on the purchase.
3. How much tax credit will home buyers get? - Although this tax credit is referred to as $8,000 housing tax credit, remember
that the total amount of tax credit a home buyer gets a percentage of the
purchase price of the new house up to maximum of $8,000. Thus in order to get a
full tax credit of $8,000 your purchased property must be above $80,000 in
value.
4. Income Limits for $8,000 home buyer tax credit - First time home buyers with modified gross annual income of $75,000 get full
benefit of this housing tax credit. The tax credit is gradually reduced for
those with income between $75,000 to $95,000 and finally a home buyer gets no
tax credit if his/her modified gross annual income is more than $95,000. For
married taxpayers, the home buyer tax credit is gradually reduced to zero for
modified gross annual income between $150,000 to $170,000.
5. This is a Refundable Tax Credit - Remember that this is a tax credit and not a tax deduction. That is qualified
first time home buyers deduct $8,000 from their total tax owed to the IRS and
NOT the total taxable income. Moreover a refundable tax credit means that in
case the total taxes you owe to the IRS are less than $8,000, you can actually
get a refund for the balance amount!
6. This $8,000 home buyer tax credit, unlike $7,500 tax credit does not need to
be repaid to the IRS - The earlier $7,500 housing tax credit was essentially an interest free loan
which the home buyers needed to repay in 15 years. However, although this
$8,000 home buyer tax credit may look only $500 more than the previous housing
tax credit, it is all yours! No need to repay it to the Federal government.
Talk to your REALTOR® or
lender to see if you qualify.
If You Are Thinking Real Estate…Think Realtor®
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Consistently, real estate has been considered an unparalleled investment. An
integral part of that investment overthe years has been the involvement of realtors®.
When buying, a realtor® will help you find a home that is both affordable and meets your needs and
lifestyle. When selling, a realtor® will help negotiate a fair price for your property and can inform you of the
tax benefits to which you are entitled. A realtor® will carry out and follow through on every phase of this important and complex
transaction.
Before investing in real estate, invest in the knowledge and experience of a realtor®.
As a buyer
Getting started is immeasurably important and choosing to work with a realtor® is the first step to a prosperous investment in real estate.
Working with a realtor®, you’ll make decisions that lead to maximum returns on your investment—decisions involving affordability, financing, lifestyle and location. A realtor® can help assess the retail value of a home and research the history of home
sales in the neighborhood.
Values of home ownership
The value of home ownership is measured by tangible benefits that include equity
built over the years and the tax advantages realized from the time you buy
until the time you sell. Other values of home ownership include privacy,
independence, roots established in the community and a special sense of abiding
satisfaction.
The investment you make in real estate can be both profitable and fulfilling.
Any way you measure home ownership, you’ll confirm the positive feelings about one of the most important investments a
person can make. A real estate agent who is a realtor® works hard to help make this investment happen for you.
As a seller
You are about to see your investment pay off. The benefits of home ownership
began the moment you became the owner and probably increased every time you made a home
improvement. Tax benefits also continue up until the time you sign the last
document at closing. To help you realize the full measure of your investment it
is important to be aware of some tax basics. Keep the following in mind:
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Tax facts when selling
Sellers are eligible for a tax deferral of gain realized upon the sale of a
home: $250,000 for a single individual or $500,000 for a married couple.
There are a number of other real estate tax benefits available to the seller. A realtor® can answer your questions or refer you to someone who can.
Remember, too, homesellers often qualify for deductions for home search costs
prompted by a job transfer to another city, or by a job-related move not
reimbursed by a new employer.
You’re wise to work
with a realtor®
By including your home in a multiple listing service, a realtor® works to assure the widest possible market exposure of your home to serious,
qualified buyers. Familiar with the local housing market, a realtor® can suggest financing methods suitable to those seeking to buy your home.
Besides making every endeavor in the selling effort, part of a realtor®’s service is to be there to show your home at the buyer’s convenience, even if you cannot.
A realtor® maintains objectivity in responding to buyer concerns when discussing price,
terms, possession and other factors. Though generally representing the seller,
a realtor® is equally obligated to be fair to the buyer and to any cooperating real estate
agent.
In short, a realtor® combines the commitment to real estate, professional service and the integrity
you look for in a real estate professional to carry out and follow through on
every phase of this important transaction.
A home is where you and your family
aremost often together
It’s a haven after a tough day...the place you come back to when vacation is over.
It’s the memories of all this and more for the homeseller—and dreams of such things for the homebuyer.
A house, on the other hand, is real estate. It’s property. It’s walls and a roof, halls and a front yard. It’s a commodity.
Selling a home can be traumatic; selling a house is not. However perceived, its
purchase or sale can be one of the most important investments you’ll ever make.
A realtor® can be counted on to make it one of your best.
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Fort Bend Publishing Group 2009
