Atlanta Home Buying March Madness: First Time Home Buyer Tax Credit DEADLINE is April 30th
Atlanta Home Buying March Madness: First Time Home Buyer Tax Credit DEADLINE is April 30th
March Madness may mean frantically searching for a home to buy for thousands of Atlanta Home Buyers as the April 3oth deadline approaches to qualify for the $8,000 Federal Tax Credit for Home Buyers. Home buyers must have a home UNDER CONTRACT by April 30, 2010 and then close in 90 days.
All procrastinators are thinking they can wait until the last week or two of April to make this decision but doing so puts most of the negotiating cards in the hands of sellers. Why so?
- FOUL trouble: It will take a couple of weeks to have the house inspected and then negotiate the repair of any defects.
- NO SUBS: Lenders are going to get backed up as they try to pre-qualify home buyers for home mortgages.
- MANAGE THE CLOCK: The best inventory will go first! Don’t wait until the buzzer to sink the winning shot.
WHAT ARE THE GUIDELINES for the $8,000 Federal Tax Credit For Home Buyers?
The National Association of Realtors published an analysis of the November 2009 legislation Congress passed to extend and enlarge the Federal Tax Credit for purchasing a home.
“As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:
- Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
- Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010
Who Qualifies for the Extended Credit?
- First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
- Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Is Available?: The maximum allowable credit for first-time home buyers is $8,000. The maximum allowable credit for current homeowners is $6,500.
How is a Buyer’s Credit Amount Determined? Each home buyer’s tax credit is determined by tow additional factors:
- The price of the home.
- The buyer’s income.
Price: Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.
Buyer Income: Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000-may receive the maximum tax credit.
These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit? Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income-over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
Can a Buyer Still Qualify If He/She Closes After April 30, 2010? Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
Will the Tax Credit Need to Be Repaid? No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale”
For more information see the National Association of Realtors website or call Sally English at 770-939-3174.
If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.
Call Sally English at 404-229-2995 for advice about buying or selling a home in Atlanta Georgia.
EMAIL Sally English and the English Team at sallyenglish@englishteam.com
