Interesting and well informed!
As it pertains to the First-Time Homebuyer Tax Credit, you are deemed a First-Time buyer and qualify if you, or your spouse, have not owned a principal residence in the three years immediately prior to your purchase... even if you have previously owned a home. There are really two programs now... the Credit as created July 2008 that applies to all qualified purchases on, or after, April 9, 2008, and the Revised Credit, effective for purchases on, or after, January 1, 2009. There are many similarities between the two programs, and some critical differences. We will focus here on the Revised Credit for Buyers who bought after January 1, 2009, or will buy before December 1, 2009.
The best part of the Revision for Buyers is that now the credit need not be paid back ... unless the home is sold within three years. A sale within three years on homes purchased in 2009 will require that the entire amount of the credit be recaptured on sale. Another benefit from the Revision is the maximum amount was increased to the lesser of ten percent of the cost of the home or $8,000. Values in our region are such that you can pretty much figure on receiving the maximum of $8,000 here. There are income limits - the full amount is available for individuals with adjusted gross income of no more than $75,000, $150,000 on a joint return. It phases out above those caps up to $95,000 and $170,000 where it is then not available.
Interestingly, IRS rules say your principal residence can take a wide variety of forms including "houseboats, housetrailers, cooperative apartments, condominiums," among others. This affords new investment opportunities for the broad thinker. How can you make it work for you?
Pay attention to changes or refinements that may be enacted in the future that modify the Act and how it is applied. The legislation happened quickly and there are certainly going to be questions of applicability that arise as individual case studies are addressed. Idea - buy now, close escrow, and file your Credit request with your 2008 return before things change too drastically.
Our Advice: Don't count on this credit for help with closing costs. This is a tax credit that will help you pay your tax obligation, not something you receive at the close of escrow. If your tax liability is less than $8,000, however, you will get a refund for the balance. You can elect to claim the credit on your 2008 tax return which makes sense considering the basic economic principal that "money sooner is worth more than money later." Renting with a roommate you like? With the low home prices and good interest rates we have these days, you can partner up on a home with a minimal down that will give you a payment not much more than you are paying in rent ... plus get $4,000 tax credit each!
Remember that you will enjoy significant tax benefits with your new home ownership, and now you also have Great Pricing ... Great Interest Rates ... and a Great Federal Incentive. What are you waiting for? Control your destiny and buy the home you want now. When it comes to choosing professionals to assist you with your real estate needs... Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781- 5472. firstname.lastname@example.org, www.carsonvalleyland.com