by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com)
The $8000 new buyer tax credit and $6500 repeat buyer tax credit expires in 60 days (April 30)…so you better get in the market now if you want to take advantage of it! Here’s the need to know:
You must have a binding, written contract by April 30, but the deal can close as late as July 1.
First time buyers get a $8000 tax deduction, “repeat buyers” get a $6500 tax deduction. The tax credit can be applied to PRIMARY residences (not investments), that include townhomes, single-family homes and condos. To qualify as a first time buyer you cannot have owned a home three years prior to the purchase. To qualify as a repeat buyer you must have lived in your principal residence five of the last eight years…you do not have to sell your current residence but you do have to vacate it and make the purchase home your primary residence. This is an excellent deal if you were planning to turn your current home into a rental after you move.
If you want to buy a short sale and use the tax credit you run the risk of losing the credit. On average, it takes about 4 months (120 days) to successfully complete a short sale…some take longer. If you are counting on the tax credit, best just to buy a home that is not a short sale. However, since short sale homes can recognize significant savings, a short sale might actually put more money in your pocket than a straight sale with the tax credit, but that’s for you to decide.
There are income limits. The full credit is only available to persons with $125,000 ($225,000 joint filers) modified adjusted gross income. Those between $125,000 and $145,000 ($225,000 and $245,000 joint) modified adjusted gross income qualify for a reduced credit. Higher incomes do not qualify.
You can apply the credit to this year’s tax return if you file before April 15, or file an amended 2009 return. Otherwise you file it on your 2010 taxes.
I borrowed heavily from an excellent article in this month’s Realtor magazine to produce this piece.
Call St. Augustine Team Realty today to take advantage of this deal…maybe the only free money you will ever see from the government! You can call agents Suzie Hancock at (904) 521-2603 or Sondra Sparapani at (904) 209-8320, or call Ron, Kate or Sean at (904) 825-0099.
Tags: $6500 tax credit, $8000 Tax Credit, St. Augustine Homes for sale, St. Augustine Real Estate