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Home Buyer Tax Credit!

by Alan Daniels

Home Buyer Tax Credit | Colorado Springs Real Estate

It is definitely a great time to buy a home!  Home prices and interest rates are at historic lows which leaves open even more opportunities as a home buyer.  Now the government has added an $8,000 tax credit to all qualified home buyers who have not owned a principle residence in the last 3 years.  Home affordability is now drawing renters into a home of their own.  Here is a chart that outlines the tax credit. 

If you do not qualify for the credit you can still take advantage of low home prices and interest rates along with a larger inventory of homes to chose from.  Start your search now to see for yourself

Home Buyer Tax Credit

FEATURE

CREDIT AS CREATED JULY 2008 APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008

REVISED CREDIT- EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 & BEFORE DECEMBER 1, 2009

Amount of Credit

Lessor of 10% of cost of home or $7500.

Lessor of 10% of cost of home or $8000.

Eligible Property

Any Single Family Residence (including condos, co-ops, townhouses) that will be used as a principle residence.

No Change.  All principle residences eligible.

Refundable

Yes.  Reduces (or can eliminate) income tax liability for the year of the purchase.  Any unused amount of tax credit refunded to purchaser.

No Change.  Purchasers will continue to receive refund for unused amount when tax return is filed.

Income Limit

Yes.  Full amount of tax credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return).  Phases out above those caps ($95,000 and $170,000).

No Change.  Same income limits continue to apply.

First Time Home Buyer Only

Yes.  Purchaser (and purchaser's spouse) may not have owned a principal residence in 3 years previous to purchase.

No Change.  Still available to first time purchasers only.  Three year rule continues to apply.

Revenue Bond Financing

No credit allowed if home financed with state/local bond funding.

Purchasers who utilize revenue bond financing can use credit

Repayment

Yes.  Portion (6.67% of credit or $500) to be repaid each year for 15 years starting with 2010 tax filing.

No repayment for purchases on or after January 1, 2009 and before December 1, 2009.

Recapture

If home sold before 15 year repayment period ends, then outstanding balance of repayment amount recaptured on sale.

If home is sold within three years of purchase, entire amount of credit is recaptured on sale.  Applies only to homes purchased in 2009.

Termination

July 1, 2009  (But note program changes in 2009)

December 1, 2009

Effective Date

Purchases on or after April 9, 2008 and before January 1, 2009.  Repayment to begin for 2010 tax year.

All revisions are effective as of January 1, 2009

**This information is a brief overview about the home buyer tax credit and should be confirmed with the latest tax code and your accountant.

Fed Meets for Drastic Interest Rate Drop!

by Alan Daniels

Interest Rates

The Fed met today and dropped the interest rate more than expected!  The half percentage point drop was double of what most economists were forecasting.  This is a definite step in the right direction to pull us out of the current housing slump, but no one knows for sure how the market will react.  It will be interesting to see what happens in the following months.  Inflation is less of a concern to the Fed now that it's pressure has eased allowing them to take such an aggressive stance. 

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