If taking advanage of the First-time Tax Credit Program is part of your plan, please know that the clock is ticking down.
If you plan on taking advantage of its generous tax credit, remember that the program expires November 30, 2009. Also, be aware that the time you'll need to close on a transaction can be up to 60 days.
From about now, you would have a little less than 6 weeks get the contract signed.
The First-Time Homebuyer Tax Credit program was part of the 2009 economic stimulus plan. It provides up to an $8,000 tax credit if you quality. A big chuck of money, by any standard.
Who qualifies? Here are the basics:
- Buyer may not have owned a "main home" in the past 36 months.
- Can't buy the home from a parent, spouse, or child.
- Your adjusted gross income for the household must be below $95,000 for single tax filers and $170,000 for joint tax filers.
Also be aware that not everyone who is qualified will get the full $8,000. The credit can not exceed 10 percent of a home's purchase price. And, if your income is close to the limit you will get a reduction in the full benefit.
But remember that this is a true "Tax Credit." It is not just a deduction. For example, someone claiming the $8,000 credit who had a normal tax due of $5,000, would be entitled to a $3,000 refund from the IRS on April 15, 2010.
You can check the program's criteria if you are in the market, but if you are serious about taking advantage, don't wait much longer. If you can't settle on the property by end of November, you won't be able to qualify.
[The Kathy O’Neal Team serves home buyers and sellers in Northern Virginia, with special focus on Chantilly, Centreville, and the communities of the Western Fairfax region.]