As you all know, right now is a phenomenal time to buy a home. The best benefit out there is for the First-Time Home Buyer. Not only are home prices the most affordable we have seen in the past 13 years, the government is offering an $8000 tax incentive. Here is a quick Q & A to help understand some of the points on this incentive:
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How much is the credit? The tax credit would be $8,000 or 10% of the purchase price, whichever is less. |
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What type of purchase is eligible? Similar to the $7,500 tax credit included in the Housing and Economic Recovery Act of 2008, the $8,000 tax credit included in the 2009 economic stimulus plan is available for the purchase of a principal residence by first-time homebuyers. |
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Who qualifies for the first-time homebuyer credit? According to the IRS, any taxpayer who has not owned a home during the 3 years prior to the date of purchase can qualify for the credit. |
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And I really don't have to repay the credit? No. This is a change from the previous $7,500 tax credit. However, if the home is sold within three years of purchase, the credit will be reversed. |
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Are there income limitations on the tax credit? The tax credit begins to phase out for individuals with adjusted gross income over $75,000 ($150,000 for joint filers). EXAMPLE: If an individual has a tax liability of $4,000 and was a first time home buyer, they will, instead of paying $4,000 to the IRS, get $4,000 back.
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Remember also that when purchasing a home through FHA that the minimum required down payment is only 3.5% and FHA will allow the seller to contribute up to 6% of the sale price for closing costs, pre-paids and impounds. So if the buyer is tight on cash 3.5% is much better than a regular conventional 10% down payment. FHA rates are still in the 5 percent range for a 30 year fixed!
As always The Thomas Davis Group would love to work with anyone that is looking to get a great deal in this great Arizona buyers market.
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Thomas Davis Group Realty is a full service Real Estate Brokerage. Our Goal as a Company is to have customer service that is not just the best, but extraordinary! We follow on simple rule: Always give
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