News for Dr Phillips, FL - Tuesday September 29th, 2009 6:40pm
If you are considering buying a home but want to time your purchase to coincide with the price "bottom", you should consider this. You have just 2 months to find and close on a home to qualify for the $8,000 federal tax credit by Nov. 30 - before the Dec. 1, 2009, deadline. If you haven't owned a principle residence home in the three years prior to purchasing your next principal residence you may qualify for this tax credit. This is not a tax deduction which only reduces the amount of income on which you calculate your tax debt, but a tax credit; you get the cash! And unlike the 2008 $7,500 tax credit, you don't ever have to pay this one back as long as the home remains your principle residence for three years. There are some limitations; the homebuyer can claim 10% of the purchase price up to $8,000, or $4,000 for married individuals filing separately and the amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for married couples filing joint returns. If you're still wondering whether home prices have stopped falling consider this line of thinking. Let's say you're considering a $150,000 property, and you qualify for the full $8,000 tax credit, but you wait to see if the property values in your target area have stabilized and you miss the tax credit deadline. Property value would have to drop more than 5% more before you would reach the break-even point. And that assumes that interest rates stay at their current historic lows. Time is running out but there is still time for a determined first time buyer to cash in. You must move quickly, get your financing arranged in advance with a lender that can close quickly, and enlist the services of a real estate professional to help you find the right property, negotiate the right deal quickly, and facilitate the quick close by tenaciously managing the process.