FINANCIAL
Is this the right time to invest in real state property?
Last summer, as you may know, Congress enancted a first-time homebuyers tax credit as a way to stimulate the housing market. Some individuals took advantage of that incentive. Once again in efforts to stimulate the economy and revive the housing market, Congress enacted an $8,000 non-refundable tax credit. These are exiting and unprecedented news. Here are some frequently asked questions about this incentive:
How much is the tax credit?
The maximum credit amount is 10% of the cost of the home up to $8,000.
What type of property is eligible?
Any single family residence, including condos, co-ops, townhouoses that will be used as a primary residence.
Is is tax credit or tax deduction?
It's a tax credit. A credit reduces taxes owed after all standard deductions are calculated.
Is there a limit depending on income?
Yes. The full amount of credit is available for individuals with an adjusted gross income of no more than $75,000 ($150,000 for a joint return).
Who qualifies as first time buyer(s)?
Anyone who has not owned or purchased a primary residence in the last three years is considered a first-time buyer in this program.
Does the buyer have to repay the credit?
No, as long as you reside in your new home for three years or longer, the credit does not need to be repaid.
When does the tax credit begin?
January 1, 2009.
When does the tax credit program end?
December 1, 2009.
How do homebuyers claim the tax credit?
Participants claim the tax credit on their federal tax return. There, the homebuyer would enter the $8,000 or 10% of the cost of the home, whichever is less, as tax credit. This reduces any tax owed or increases the refund to the homeowner.
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