Jersey Shore Homebuyers Benefit From Tax Credit
There has been much publicity about the first-time homebuyers income-tax credit passed by Congress last fall. But how does this tax credit work and how will it help Jersey Shore homebuyers?
To qualify for the tax credit, Jersey Shore homebuyers cannot have owned a home in the previous three years. The home must be a principal residence and purchased between April 9, 2008 and July 1, 2009.
The credit is equal to 10 percent of the purchase price, up to $7,500. Single taxpayers with modified adjusted gross income (MAGI) up to $75,000 and couples with MAGI up to $150,000 will qualify for full credit. Singles with MAGI up to $95,000 and couples with MAGI up to $170,000 will get a reduced amount. Those with higher incomes don’t qualify.
If the amount of tax a homebuyer owes is less than the amount of the credit, they get to keep the difference in the form of an IRS refund.
There is the catch, however, the homebuyer must begin to repay the credit in two years in increments of about $500 a year over a 15-year period for those who received the full credit
Homebuyers who sell their home before the credit is repaid must pay off the loan with any profits. If they sell the home at a loss, the loan is forgiven.
The tax credit is due to expire in mid-2009. The National Association of Realtors® is lobbying Congress to extend this date, as well as, make the credit available to all buyers and to eliminate the repayment requirement.
If you are Jersey Shore homebuyer, the tax credit may be just what you need to give you the cash needed for a down payment or closing costs. You just need to plan the repayment into your budget. New Jersey offers numerous first-time homebuyer loan programs you might want to consider. Visit PatrickParkerHomes.com or give me a call. I am glad to discuss your options with you.