The government’s tax credit program for first-time homebuyers (people who haven’t owned a home during the past three years) is scheduled to end soon. In fact, first-time buyers must complete their home purchases before December 1, 2009…meaning the absolute last day to close on a home to qualify for the tax credit is November 30, 2009. My advice – if you are seriously considering purchasing a home, and you will qualify for the tax credit, you probably want to put in an offer in on your dream home in the next two weeks. As a first-time homebuyer, you may be eligible for a tax credit of 10 percent of the purchase price, up to $8,000.
It is important to remember that the $8,000 tax credit is just that, a tax credit. It is a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 in the end of the day. So, if you owe $8,000 in income taxes and you are able to take advantage of this tax credit, you would owe nothing. Zilch. Nada. Even better yet, the incentive is actually refundable. This means that you can receive a check for the credit even if you have little income tax liability.
If you still don’t know if you qualify, here is the low-down. The $8,000 incentive starts phasing out for couples with incomes of more than $150,000 and single filers with incomes of more than $75,000. The program is completely phased out at incomes of $170,000 for couples and $95,000 for single filers. The tax credit is applicable to any home that will be used as a primary residence. Buyers will have to repay the credit if they sell their home within three years.
At Bushari Group Real Estate, we help first-time homebuyers everyday. If you have any questions about market conditions in your area or just want to chat about properties available in Boston, give us a call. Feel free to surf our top-rated websites at www.bushari.com and www.bostonianlofts.com.