Judging from the response to my last post (which I also sent out as an email) on the stimulus plan, people are really interested in hearing the details of the tax credit for homebuyers. Unlike a tax deduction that gets subtracted from gross income before tax is calculated, a tax credit is deducted from the total tax owed, meaning that a qualified tax payer would receive the entire $8000 deduction.
The stimulus bill itself is huge (someone told me over 11,000 pages long), so I've distilled the contents of this tax credit to three salient points (perhaps I've missed my calling as a lawmaker!):
- The credit is for first time homebuyers. "A first time homebuyer" is defined as a person who has not owned a property in the past three years. Ownership of a rental property or a vacation home may not disqualify a buyer.
- There is an income limit to qualify of $150,000 for couples filing jointly and $75,000 for a single. (Partial credits may be available for couples with AGI up to $170,000, and single filers up to $95,000.) The credit does not need to be repaid as long as the purchaser owns and lives in the house for 36 months.
- The home must be purchased between January 1, 2009 and December 1, 2009. The credit can be deducted from 2008 taxes if you've recently purchased a home. The tax credit is determined by the date of occupancy. So if you're buying new construction that won't be ready until 2010, you will not be eligible for the deduction.
The stimulus package is very much in flux, and changes may happen. Before you purchase your new home, be sure to consult a tax professional to determine how this new stimulus package will affect you personally.
In recent weeks, I've spoken to a lot of savvy people who are eager to take advantage of the unprecedented opportunity this housing market offers to buyers. They recognize that now is the time to buy property, but for many of them, the process is daunting.
I've developed a presentation specifically for buyers, designed to take the mystery out of the home buying process in Rockland County by breaking it down into manageable steps. If you've been hesitating to buy a home because you just don't know where to start, call me for an appointment. I'll explain the buying process in detail, and answer any questions you have. Then you'll be armed with enough information to determine if now is the best time for you to buy, too.
jennifer mallory | associate broker | "real integrity in real estate"
keller williams hudson valley realty II | 130 main st, nyack, ny 10960
845.521.3135 | 845.323.6247 mobile | www.jennifermallory.com