Are you a Property Virgin? $8,000 $Reasons to find why now might be the time to buy your first home
I have got to give credit where credit is due..Krisstina Wise is an Austin real estate broker, head of the Good Life Team. Earlier today she followed me on Twitter. I decided to check out the website of her self-described “hip” Austin real estate brokerage. I found it engaging, well-thought out, informative and professionally done. They use video judiciously and well and have some good tools for buyers and sellers. Their blog had a post on the new federal tax credit for first time home buyers. It wasn’t the feds who coined the “Property Virgin”, nor did I, so I MUST give credit where credit is due. Thanks to Krisstina and the Good Life team. Here is a bit of their post:
No joke. The 8,000 reasons to buy today are quantified in terms of real dollars â€” $8,000! Thatâ€™s right. As part of the stimulus package, Uncle Sam is offering â€œFirst-Time Homebuyersâ€ (Letâ€™s call you Property Virgins) up to $8,000 in the form of a tax credit for purchasing a home in 2009.
If you have been on the fence or if you are considering buying a home in the next year or so â€“ you must learn about the American Recovery and Reinvestment Act of 2009 â€“ The First-time homebuyer tax credit. This is a special opportunity that enables you, as a Virgin, to be one of the few who can BENEFIT from this crazy economy.
What is it? As part of the Stimulus package, a Property Virgin who purchases in 2009 is eligible to receive up to 10% of the cost of the house â€“up to $8,000â€“ in the form of a tax credit on their tax return (did we just use stimulus and virgin in the same sentence?). A tax credit means that the $8,000 is a dollar for dollar reduction in what you owe in taxes. This means that if you owed $8,000 in income taxes and you received the $8,000 tax credit, you would owe nothing to the IRS. If you are owed a refund of $1,000, after the credit you would receive a refund of $9,000! And no, you donâ€™t have to pay it back if you live in your new home for at least 3 years.
Actually both the term property virgin and first time buyer are not really accurate. Eligibility for this tax break really focuses on your property ownership status over the past three years, so you may be eligible even if you are not a true property virgin. There are some income restrictions and other guidelines here. This new incentive differs from the one offered last summer in that it is not repayable unless you move out of the home in less than 3 years.
I am not claiming to offer tax advice here, or in any venue for that matter, so be sure to talk to you tax professional to understand the ins and outs of this tax credit and how it might apply to you. And there is a sense of urgency as well. The credit, which can be claimed on your 2008 OR 2009 federal return, applies to homes purchased between January 1, 2009 and December 1, 2009, so maybe it is time to get off the fence! And please contact us if we can help you to find your first home!