Home buyers need to take advantage of the tax credit now

There is now just over 5 months left to take advantage of the $7500. temporary tax credit for first-time home buyers. This credit began April 9, 2008 but will end on July 1, 2009. If you are a first-time home buyer waiting for the right time to jump, now may be the time before this opportunity is missed.

Homeownership has always been part of the American dream, and it remains the best way for an individual or family to build wealth over the long term, even in this current market. Like other investments, housing is subject to cycles. But over the long-term, real estate has consistently appreciated, even through periodic adjustments in local markets. On a national level, home appreciation has increased 4 to 5 percent annually and in King county home prices remain more than 50% higher than they were in 2002.

Homeownership provides financial advantages over other investments. These include tax benefits such as deductions for mortgage interest and real estate taxes, and capital gain exclusion for principal residences. Rent payments will increase over the years, but fixed-rate mortgages won't.

• The tax credit is available for first-time home buyers, which includes people who have not owned a home that is their primary residence for a least three years.
• The credit depends on how much money the home buyer makes. To receive the full tax credit amount of $7500., the income limits are $75,000 a year for single taxpayers and $150,000 for married taxpayers filing jointly. For partial credit the upper limit is $95,000 and $170,000 respectively.
• The home purchase must occur from now until July 1, 2009.
• Qualified home buyers claim the credit when they file their income tax return. The credit is refundable, which means if their tax liability is less than the credit, they will get a check from the IRS for the difference.
• The tax credit works like an interest free loan with up to 15 years to pay it back. For example, a home buyer claiming the full $7500. credit would repay the loan at a rate of about $500 a year.

Interest rates are at historic lows and due to the housing downturn, there is a large selection of homes on the market to choose from, and prices are more competitive than they have been in years. Find out more about the tax credit here.

If you are in the market for a home in Kent, Renton or the surrounding area, please contact me in any manner you prefer.
Call or text me on my cell phone @ 206 617-2247
Email @ gregsaffell@comcast.net
I'm available 777. 7am-7pm 7 days a week.

Published by Greg Saffell/South Sound Surfer
Home buyers need to take advantage of the tax credit now