First Time Homebuyers Tax Credit

Seems like there’s a whole lot to talk about these days with regard to housing nationally and locally.  With all the national attention focused in on the housing crunch, here in Austin we’ve had some reasons to consider ourselves (at least relatively) pretty fortunate. Consider Forbes’ assessment of Austin as its number two pick for where to buy real estate:

The University of Texas campus provides young blood and research-related jobs to No. 2 city Austin. This state capitol is a hip area on the rise. The vacancy rate has fallen by 37.5% in the last 24 months to just 1.5%, despite a lot of building in recent years. Forbes July 14 Issue

Consider also new opportunities arising out of the new housing bill that provides for a tax credit for first time home buyers.  The Housing and Economic Recovery Act of 2008 (H.R. 3221) allows first-time home buyers to take a $7,500 tax credit from the purchase of a single-family home, townhome or condominium apartment.  This is a fantastic opportunity for a buyer to actually reduce federal income tax exposure while purchasing a home in a market where buyers have more leverage than has been seen in the last ten years.

First-Time Home Buyer Tax Credit at a Glance

• The tax credit is available for first-time home buyers only.
• The maximum credit amount is $7,500.
• The credit is available for homes purchased on or after April 9, 2008 and before
  July 1, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
• The tax credit works like an interest-free loan and must be repaid over a 15-year period.

How Does the Home Buyer Tax Credit Work?

This credit offers a $7500 reduction in taxes for first time home buyers.  And even if your taxes for the year amount to less than $7500, this is a refundable credit, which means that if the new homeowner pays less than $7,500 in federal income taxes, the government will write them a check for the difference. For example, if $5,000 in federal taxes is owed, the taxpayer would pay nothing and a $2,500 payment would be received from the IRS. If a qualifying home buyer were owed a $1,000 tax refund, they would receive $8,500.

How Do I Get More Information?

Here’s a link (http://www.federalhousingtaxcredit.com/faq.php) to the frequently asked questions about the tax credit.  If you or someone you know might like more information on this credit, please feel free to email me at sam@archeraustin.com or call me at 512-633-4650.