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$8,000 Tax Credit Ending Soon

Every good story has a beginning and an end. The $8,000 real estate tax credit is no exception. Whether we like it or not, its ending soon. So if you want to take advantage of it, first time home buyers have till April 30, 2010 to have a contract accepted and till July 01, 2010 to close. If you meet these deadlines, youll qualify for this special incentive.

How exactly does it work? First you have to locate a home and get an offer accepted. This is easier said than done so you have to act now.  Remember that a single property can have multiple offers so you could easily lose in the bidding war. Plan ahead to increase your odds of winning. 

If your offer is accepted, you have to get a mortgage. This can take as long s 30 – 45 days. Lastly, you must close on the home for it to be considered occupied and make you qualified for the credit. For first-time buyers, this is equivalent to 10 percent of the cost of the home or as much as $8,000. 

In long-term homeowners, the credit is 10 percent of the purchase price or a maximum of $6,500. It can go as low as $3,250 for a married individual filing separately. So dont think that $8,000 is a guaranteed amount. Eligible properties include any single-family home (including condos, co-ops and townhouses) that will serve as the taxpayer’s main residence.

The good news is that those with big incomes can qualify for the credit. The income limits for homes bought after November 6, 2009 were recently raised. Neither does the credit have to be repaid provided the buyer remains in the home for at least three years. If the home is sold before that period, the buyer must pay back the total amount of the credit, including the refund.