Take Advantage of Government Tax Credits~From our Real Estate Expert~Patrick Howells

We want to introduce our incredible Real Estate Expert Patrick Howells to our site.  He will be sharing from time to time his expertise with us.  To view his website go HERE.

In today’s world every little bit helps.

THE GOVERNMENT’S HOUSING TAX CREDITS ARE COMING TO AN END, BUT IF YOU HURRY THERE IS STILL TIME TO TAKE ADVANTAGE OF THIS GREAT OPPORTUNITY.

The first thing to make clear is that these are tax CREDITS.  This means that if you owed $2,000 in taxes and you qualified for and took advantage of the first time home buyer tax credit of $8,000, that you would receive a return of $6,000.  THESE ARE LIKE CASH IN YOUR POCKET, NOT MERELY A DEDUCTION.

There are 2 main Housing Tax Credits:

$8,000 First-time Home Buyer Tax Credit

• The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
• The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
• The tax credit applies only to homes priced at $800,000 or less.
• The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
• For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
• For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit

• To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
• The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
• The tax credit applies only to homes priced at $800,000 or less.
• The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
• Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

Here are some helpful links that will give you more information and help to answer your questions.

The Department of Housing and Urban Development

Federal Housing Tax Credit Information

How to get the Housing Tax Credits

We are excited to have Patrick on board as our real estate expert.  To check him out on our experts page go HERE.