$8,000 Tax Credit Expires December 1st : Palm Beach Gardens Short Sales

by Rodney Forbes on August 25, 2009

Jun

30

1st-time-buyer-2As home prices remain at bargain levels, and interest rates continue to stay at historic lows, many people are asking for details on the First Time Home Buyer Tax Credit. Who qualifies, when and how do I get the money, are there restrictions?

The following article gives some answers to basic questions as well as the most important answer for most, the expiration date.

According to Keystone Custom Homes, first-time buyers need to be aware that the tax credit is only available now until Dec. 1, 2009 on a closed home purchase. There are other aspects of the tax credit that are important to first-time home buyers, including:

– The tax credit is not a deduction. “It’s much better than that,” says Wisdom. With a deduction, you can only write off the deduction against your total income. So if you make $60,000, you can only reduce your total income by the amount of the deduction, which really isn’t that much savings. For instance, if you have an $8,000 deduction and earn $60,000, you still have pay taxes on $52,000. That’s not much of a savings. But the $8,000 First-Time home buyer tax credit is dollar for dollar. “So you actually reduce your tax payment by the amount of the credit. For instance, if next year, you go to file your taxes and learn that you owe nothing to the IRS, you will receive a check back for $8,000!” says Wisdom.

– First-time home buyers can receive a short-term loan to use the tax credit toward a down payment. In late May 2009, the Federal Housing Administration announced that it will allow eligible first-time home buyers to apply the $8,000 first-time home buyer tax credit to a down payment on a home. This can be done through no-interest loans now available through FHA-approved lenders in the Commonwealth. The loans must be paid back using the tax credit, which is applied to a home buyer’s 2009 tax return. First time home buyers can learn more about this opportunity by talking to their FHA-approved lender or mortgage broker.

For Florida, governor Charlie Crist approved the program as of July 1st. The details of who will administer the program are not clear. The program may be run by the Florida SHIP program.

– The first-time home buyer tax credit is available even if you make good money. The tax credit is available to single first-time home buyers who make less than $75,000 a year or couples who make less than $150,000 a year. “That income covers a lot of Americans,” says Wisdom. “And it’s also based on adjusted gross income. So if you make more than those limits, but deductions reduce your income to those limits, you still might be eligible for the tax credit or a good portion of it.”

– There are ways to receive your tax credit now without applying for a loan. First-time home buyers in essence can gain the benefit of the up to $8,000 tax credit this year by reducing their income withholdings to the amount of the credit. This will allow you to see more cash in your take home pay. And that’s money can then be used toward a down payment or for moving and other costs related to owning a brand new home.

If you have recently closed on a home and plan to use the tax credit, you can also file an amended return for your 2008 taxes and get the tax credit now. Discuss this with your accountant or CPA.

“Obviously, a first-time home buyer should check with their accountant before making any assumptions,” says Wisdom. “But right now, we are seeing record traffic at many of our 24 communities, and much of their interest is due to exceptionally low prices coupled with the Federal Tax credit. Add that to the fact that interest rates, while beginning to rise, are still at near-historic lows, and the combination of these factors makes it the best time in generations to buy a first home.”

Source: Market Watch

If you are interested in buying or selling a home in the Palm Beach County area, specifically Palm Beach Gardens, Jupiter and West Palm Beach, please visit my Forbes Realty website. For frequently updated information on foreclosures, short sales, real estate news and market conditions visit my South Florida Real Estate Report blog. There are many free reports as well as free access to MLS listed properties. You can also call 561-337-4810.

 

Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc. Rodney has co-authored the book “Should I Short Sale My Home?”. Get your FREE copy at www.SouthFloridaRealEstateReport.com

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Comments

3 Comments so far

  1.    real estate web 2.0. on July 9, 2009 1:21 pm Edit This

    There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a “short sale.”

  2.    real estate web 2.0. on July 9, 2009 1:27 pm Edit This

    I just did a short sale on an investment property of mine. I worked with a company that specializes in short sales http://www.HousingAssist.com. They got the process completed for me in under 90 days. I’ve also heard many horror stories so I am very happy it went smoothly.

  3.    foreclosure marketing on July 9, 2009 1:28 pm Edit This

    When the value of a home drops by 20%, it’s tempting to let it go into foreclosure, or work out a short-sale agreement with the bank. But giving up a current home in the hopes of paying less on a future home may cost even more money – or put your finances in a riskier situation.

Palm Beach County home buyers be aware. If you are considering a short sale or foreclosure purchase to take advantage of bargain basement prices, it usually takes longer to close these tranactions, so don’t wait until the last minute to act. Many homes for sale in Jupiter, West Palm Beach and Palm Beach Gardens are having multiple offers submitted.
For more information call Rodney at Forbes Realty of South Florida, 561-337-4810, or go to http://SouthFloridaRealEstateReport.com and leave your contact information.

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