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Want to know more about the $8,000 federal tax credit for first time buyers? Here are some of the details:
- The tax credit is equal to 10% of the purchase price of the home, up to $8,000.
- The tax credit does not have to be repaid as long as the Buyer maintains the home as their principal residence for three years after the purchase date. Don’t sell it, move out or rent it, if you want to keep the tax credit.
- It is only for first-time home buyers purchasing a principal residence between January 1, 2009 and April 30, 2010.
- Please note that if a Buyer has a binding sales contract by April 30, 2010 and closes by June 30, 2010, they will qualify.
First-time home buyer is defined as not having owned a home for at least 3 years.
- Taxpayers with incomes that exceed the limits by up to $20,000 above the maximum income limit, may qualify for a percentage of the tax credit.
- If the home was purchased between January 1, 2009 and November 6, 2009, the income limits are up to $75,000 for a single tax payer and up to $150,000 for a married couple filing a joint return, to get the full tax credit.
- The types of homes that qualify are newly built and existing single family homes, town homes, condominiums, manufactured homes and house boats.
- The definition of principal residence is the same as the definition used to qualify for the $250,000 and $500,000 capital gains tax exclusion for the sale of a principle residence.
- A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS. This is not the same as a tax deduction.
- If the home was purchased between April 9, 2008 and January 1, 2009 you may qualify for a different tax credit up to $7,500, but the rules are different on this. This tax credit does have to be repaid and is more like an interest free loan.
- If you are not a U.S. citizen you may still qualify if you are not a non-resident alien (as defined by the IRS)
- For more information on the tax credit, contact your accountant.
If your plan is to move from one home to another, just putting your home on the market isn’t enough. Your home will need to be ready to show and you’ll need a strategy to accomplish the sale and purchase of another home in a reasonable time frame.
With 10 years selling homes in metro Salt Lake and 20 years in the real estate business, I have many strategies and an in depth understanding of what it takes to help you sell and buy another home. Call or email me if you’d like to take advantage of this opportunity!
Contact SLCHomeBuyer and Kevin Coyle
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