Posted by: Roby Robertson | February 15, 2009

Lake Norman Real Estate;First Time Home Buyer Tax Credit Explained

FIRST-TIME HOMEBUYER TAX CREDIT 

As Modified in the American Recovery and Reinvestment Act

February 2009

 

With all the talk of Stimulus Packages, it can be very confusing. Is it $15,000 or $7,500 or $8,000. Do I have to pay it back? Am I eligible? How do I take advantage of this windfall?

One of the key questions I have been receiving is what does “refundable” mean? It means that if you do your taxes and your tax liability is only $5000, that gets wiped out and you get an additional $3000 back (assuming you bought a house worth more than $80k, it is 10% of the purchase price up to $8000). If you have no tax liability, you get $8000. If you are due a refund of $1000, you get $9000 total back. There may be exceptions to this but that is how it works for the vast majority of people.

This is in this way much better than the Senate’s $15,000 credit that would have been spread over two year’s tax liability.

Credit Amount: 10% of purchase price up to $8000.

Eligible Property: Any family residence (including condos, co-ops, townhouses) that will be used as a principal residence.

Refundable: Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.

Income Limit: Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return).

First Time Home Buyer Only:Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.

Repayment:No repayment for purchases on or after January 1, 2009 and before December 1, 2009.

Termination:December 31,2009.

Effective Date: January 1, 2009.

All in all, this is  great incentive to purchase your Lake Norman and Charlotte Area home during 2009.  With interest rates still at historic lows and all the inventory of homes, this could be the best time ever to buy a home.

If you would like assistance with your real estate needs in the Lake Norman and Charlotte areas, please contact your Lake Norman Area Agent at 704 451 7051 or by email!

See Also:

Be The First To See Lake Norman Hot New Listings as soon as they become available.

What would my Lake Norman Home Sell For?

Why Lake Norman is such a great Destination

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