Austin, TX (PressExposure) October 13, 2009 -- The First-Time Homebuyer Tax Credit is set to expire December 1, 2009, but thereâs still time for prospective buyers to take advantage of a potential $8,000 in savings when purchasing a new or existing home. To qualify, home buyers must meet certain income requirements and not have owned a home in the past three years. Affinity Properties of Austin, Texas can help first-time home buyers understand, qualify, and apply for this valuable tax credit.
According to the National Association of Realtors, approximately 350,000 home sales nationwide have been attributed directly to the First-Time Homebuyer Tax Credit. One of the most effective programs of the administrationâs stimulus program, it has provided first-time buyers a chance to purchase homes for their families. Equally importantly, it has boosted the market for home sales in general, allowing homeowners affected by the recent housing industry slump to sell their homes for a profit and move into new homes. This âdomino effectâ has had positive effects for Austinâs housing market in particular, keeping foreclosure rates low and home sales stable.
Part of the American Recovery and Reinvestment Act of 2009, the First-Time Homebuyer Tax Credit is intended to help families purchase their first home. Available for newly built homes or existing homes, the credit is equal to ten percent of the purchase price of the home, up to $8,000. The full credit is available to single home buyers who make $75,000 or less in modified adjusted gross income per year; the income limit is $150,000 for married couples. A reduced credit is available for those making up to $95,000 for individuals and $170,000 for couples. Neither member of a married couple can have owned a home in the past three years in order to qualify for the credit.
The First-Time Homebuyer Tax Credit replaces the previous tax credit enacted by Congress in July 2008. While income limits are basically the same, the new credit differs in that it is a true credit, and need not be repaid; the 2008 version required repayment over fifteen years. Home buyers can apply the First-Time Homebuyer Tax Credit against their 2009 tax return or file an addendum to their 2008 tax return, depending on which is more advantageous.
This credit is applicable to the purchase of a primary residence. This includes single-family homes, condominiums, manufactured homes, and houseboats. In order to qualify for the credit, the home must be purchased from someone other than the buyerâs parents, children, or spouse. The First-Time Homebuyer Tax Credit is available even to buyers who owe no tax liability. In some cases, it can be directly applied to the cost of the home. Lenders who provide FHA-guaranteed mortgages can offer short-term loans, essentially buying the credit from the home buyer, allowing them to apply the credit directly to reduce the mortgage amount upfront. This allows homeowners to immediately realize $8,000 in equity in their new home.
The real estate specialists at Affinity Properties can help home buyers sort through the qualifications and paperwork required to receive the First-Time Homebuyer Tax Credit. Time is running out on this valuable credit; act today to ensure you donât miss out.
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