Are you a first time home buyer; if you are you have a limited time to take advantage of the up to $8,000 tax credit. A lot of misunderstandings are out there concerning this program, here are the facts:
1) You need an Adjusted Gross Income (AGI) of less than $150,000 - how do you know that? If your combined income (spouse and you) is less than $150,000 you qualify it your combined income is over $150,000 call your tax advisor, they will know!
2) Have you and your spouse owner a home in the past 36 months?
3) Do you plan to stay in residence for at least 3 years?
If you answer yes to all the above questions, now is the time to buy!
Why should you buy now other than to take advantage of the up to $8,000 tax credit?
Interest rates are lower than they have been for the last 50 years.
Many homes are on the market - a lot of very good deals out there!
You've heard buy low and sell high - well it's the same for real estate, in many areas inventory is up and prices are down. Many good buys are available, in our area. You may qualify for up to $8,000 in tax credit - that's just icing.
How does the tax credit work - a tax credit is not a tax deduction. This specific tax credit does not reduce income that is subject to tax - that is a tax deduction, it is a dollar for dollar reduction in tax liability. An example of how these differ is an $8,000 tax deduction would result in a $2,240 tax savings for a 28 percent taxpayer. But, an $8,000 tax credit would result in $8,000 in tax savings for the same 28percent taxpayer.
Still have questions, please call me 712-574-5426 and I will walk you through it. Now is not the time to sit on the fence if you qualify for this tax credit, it is scheduled to be gone on December 1, 2009. That means you have to have the property closed by that date.
source Pat Zaby, CRS, CCIM, speaker at 2009 IAR Annual Convention. www.patzaby.com