Don't forget that the $8,000 Home Buyer Tax Credit expires on December 1st, 2009! This means that you will have to have closed on your property by that November 30th, NO EXCEPTIONS. I would not wait until the last minute. Closings are often delayed, and especially short sales (which I am hesitant to even recommend at this point- you may not have enough time) will be delayed.
Once again, here is a breakdown of the $8,000 First-Time Home Buyer Tax Credit:
- You must be a first-time home buyer. This means you must not have owned a principal residence within the last 3 years. What if I've never purchased a home, but my wife has? For married tax payers, both you and your spouse must be first-time homebuyers. For those that are unmarried joint purchases, either of you may be a first-time homebuyer. Also know that in any case, the home must be your primary residence.
- How much of this Tax Credit will buyers get? Don't forget, in order to receive all $8,000- the purchase must be atleast $80,000. The total tax amount a buyer can get is equal to 10% of the purchase price.
- You must close on your home, on or before December 1st, 2009.
- Income limits. Single taxpayers that gross $75,000 and under will reap the full rewards of the tax credit. It tapers off and the amount is adjusted for those that make between $75 and $95,000. A single homebuyer receives no tax credit if they gross more than $95,000. For married taxpayers, the amount needs to be under $150,000 and it tapers off until it reaches $170,000. Those that gross more than $170K are out of luck.
- This is a refundable tax credit which means that you can deduct $8,000 from your total taxes owed to the IRS. If you are expecting to get money back from the IRS, you can actually get a refund for the balance amount!
I cannot stress enough that time is running out. I know it seems that we still have plenty of time left, but with delayed closings through financing, short sales, and insurance delays (especially with no insurance companies writing insurance policies if there is a named storm off of the coast), I wouldn't chance it.
Another thing I've noticed and predict is that people will wait until the last minute and will scoop up the good properties a couple of months before the deadline. While this will give our local Charleston real estate economy a quick "boost", people will compete for good properties and won't get the best deals.
If you have any questions about the $8,000 First Time Homebuyers Tax Credit, give us a call!
Mike Ciucci specializes in the Charleston SC real estate market. He has been a Charleston realtor for over 15 years, focusing on quality and attention to detail his clients have come to expect.