Thursday, February 26, 2009

Happy Days are Here Again, $8,000 Home Buyer Tax Credit

Here is info on the new “American Recovery and Reinvestment Act of 2009” First-time home-buyer tax incentive. Call me if you have questions.

A CONSUMER GUIDE TO THE FIRST-TIME HOMEBUYER FEDERAL INCOME TAX CREDIT As Modified in the American Recovery and Reinvestment Act February 2009



Amount of Credit

The amount of the homebuyer federal income tax credit

is the lesser of 10% of the cost of the home bought or $8,000.

Eligible Property

Any single-family residence (including a condo, co-op, or townhouse) may be an eligible property under the homebuyer income tax credit,

provided it will be used as the homebuyer’s principal residence.


This homebuyer income tax credit reduces income tax liability. The $8,000 tax credit is a clean refundable credit, unlike the one that was passed last summer, which required a repayment. If you qualify as a first-time buyer (i.e., haven't been a homeowner in the past 3 years), then you can claim the $8,000 to reduce your tax burden. If the $8,000 is greater than the tax you owe, then you will get a refund check for the difference. Example: you owe $2,000 in taxes on April 15, 2010. But if you bought a home before the stimulus expiration on Dec. 1, 2009,

then you will get a tax refund check for $6,000 from the IRS.*

Income Limit

In order to be eligible for the homebuyer income tax credit in full, the homebuyer can have an annual adjusted gross income of no more than $75,000 ($150,000 on a joint return). A homebuyer with an annual adjusted gross income above that level and up to $95,000

($170,000 on a joint return) is eligible for a reduced tax credit.
First-time Homebuyer Only

The homebuyer income tax credit is designed for first-time homebuyers, which means the homebuyer (and/or the homebuyer’s spouse) can not have owned a principal residence in the 3 years prior to purchase of the eligible property.
Revenue Bond Financing

A homebuyer who utilizes revenue bond financing

may be eligible for the homebuyer income tax credit.

Repayment and Recapture

There is no repayment of the homebuyer income tax credit by the homebuyer. However, if the eligible property is resold within three years of purchase, the entire amount of homebuyer income tax credit is recaptured on the sale.

Effective Date

The First-Time Homebuyer Federal Income Tax Credit is effective for purchases on or after January 1, 2009 and before December 1, 2009. This guide reflects a modification from the First-Time Homebuyer Federal Income Tax Credit, which remains in effect for homes purchased by eligible homebuyers between April 9, 2008 and Dec. 31, 2008.

* Seek advice from a professional tax advisor for specific tax calculations and timing for claiming the tax credit.

SOURCE: Based on information provided by the National Association of Realtors. For modifications from prior tax credit announced in April 2008, click here.

Friday, February 20, 2009

What's Hot?

I don't think anyone would disagree that 2004, 2005 and 2006 were hot sellers markets. Prices were at all time highs, and properties were selling like crazy. Multiple offers and sales over-asking-price were not uncommon. Well NOW, Vermont's sales market is undeniably a HOT buyers market in 2009. Prices have come down and buyers are out in droves. Well-priced listings are selling in record time, and multiple offers over asking price are not uncommon again.

Buyers have everything to their advantage. First low interest rates even below 5% at times. Secondly, low prices - housing prices have come down an average of about 15% in Northwest and central Vermont. Next, banks are willing to deal on foreclosure properties and short sales, and there are plenty. AND lastly, the new tax credit offers up to $8,000 to first-time home-buyers. This all takes home-buying to a whole new level! It is the perfect buying climate. Some may argue THE BEST TIME EVER to buy a house. Of course that is assuming that a few general conditions exist. You have to have a job, a little money in the bank, and a good credit score. Just like the good old days of 2002 and before.

If you meet the conditions above, you should be looking to buy. If you are a first time home buyer, (you or your spouse have not owned a home in the past three years,) you have no choice but to buy. The government will give you $8,000 to buy a home. There is talk that you may be able to use the credit towards your down payment!! Now that is hot!!

Here is a link to Vermont's latest foreclosures. Call or email me for more info on any of these listing or to learn more about the new tax credit.

Current Vermont Foreclosures.