Dominic Pallini 239-949-2117
Broker Associate,CRS,SFR,GRI,ABR, e-PRO
RE/MAX Estates
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Welcome to your complete Real Estate resource. Services covering the Naples, Bonita Springs, Estero and Fort Myers areas. Here you'll find everything you'll need to buy or sell a home, as well as learn about the market. It is my goal to provide you with superior service at all times.
Learn About Me
"VOTE NO ON 4" - www.Florida2010.org
Q&A clears the air about homebuyer tax credits
McLEAN, Va. – Nov. 25, 2009 – If you’re in the market for a home, the
world is your oyster. Interest rates are at record lows. Housing prices in
many parts of the country are still depressed. And you may be eligible for
a generous tax break, even if the home you buy isn’t your first.
On Nov. 6, President Obama signed legislation that provides a $6,500 tax
credit for some current homeowners who buy another home. The law also
extends the $8,000 tax credit for first-time homebuyers, scheduled to
expire Nov. 30, until next spring.
A lot of people are interested in taking advantage of this tax break, but
the expanded credit also has whipped up a lot of confusion. Here are some
answers to frequently asked questions:
Q: How do I qualify for the $6,500 credit?
A: This credit is available for homebuyers who sign a binding contract on
a new or existing home by April 30, 2010, and settle by July 1 (deadlines
that also apply to the first-time homebuyer credit). You must have lived
in your existing home for five consecutive years out of the last eight.
The home you purchase must be your primary residence. However, the law
doesn’t require you to sell your old home, says Bob Meighan, vice
president at TurboTax, the tax software provider. You can use it as a
second home or a rental and still claim the credit, he says.
Q: I sold a home I had lived in for more than five years and bought a new
one in August. Do I qualify for a tax credit?
A: No. For existing homeowners, the $6,500 credit is limited to homes
purchased after Nov. 6.
Q: Does the home I buy have to be more expensive than the one I own now?
A: No. While the real estate industry is hopeful that homeowners will use
this credit to buy a nicer place, there’s no prohibition against using it
to downsize, Meighan says. That makes this credit particularly useful for
seniors who are interested in moving into a smaller home.
If you are planning to move up, keep in mind that you can’t claim the
credit if the purchase price of the home exceeds $800,000. Unlike some
other tax credits, this one doesn’t slowly phase out once you exceed the
threshold, Meighan says. If you buy a home for more than $800,000 – and
that refers to the purchase price, not the assessed value or the amount of
your mortgage – you are ineligible for the credit, period.
The $800,000 cap also applies to first-time homebuyers, but only those who
purchase a home after Nov. 6. First-time homebuyers who bought a home for
more than $800,000 between Jan. 1 and Nov. 6 can still claim the credit,
assuming they meet the other criteria, Meighan says.
Q: I’m an existing homeowner, and would like to build a new home. Can I
claim the credit?
A: Yes, but make sure your builder is good at meeting deadlines. You can
claim the credit as long as you have a binding contract in place by April
30 and close by July 1. In the case of a new home, the closing date is the
day you move in, Meighan says. If your home isn’t habitable by June 30,
you won’t be able to claim the credit, he says.
Q: I bought a home in 2008 and claimed the old $7,500 first-time
homebuyers credit, which must be repaid over 15 years. Did the new law
change that rule?
A: No. That credit, which was available for homes purchased between April
9, 2008, and Dec. 31, 2008, must still be repaid.
The $8,000 first-time homebuyer credit, available for homes purchased
after Dec. 31, 2008, doesn’t have to be repaid as long as you remain in
the home for at least three years. Existing homeowners who qualify for the
$6,500 credit don’t have to repay that money, either, as long as they meet
the three-year requirement.
Q: We have a rental home and would like to sell it to our son, who has
never owned a home. Would he qualify for the first-time homebuyer credit?
A: No. The legislation specifically prohibits taxpayers from claiming the
credit if the sale is between “related parties,” Meighan says. A home sale
to a parent, grandparent, child or grandchild would fall into that
category.
Q: I sold my home this year and have been renting since. If I buy a new
home, do I qualify for the expanded credit?
A: Yes, as long as you meet all of the other requirements, says Mel
Schwarz, partner with Grant Thornton in Washington, D.C. The eight-year
period used to determine eligibility ends on the day you buy your new
home, he says.
Copyright © 2009 USA TODAY. All rights reserved
Welcome to your complete Real Estate resource. Services covering the Naples, Bonita Springs, Estero and Fort Myers areas. Here you'll find everything you'll need to buy or sell a home, as well as learn about the market. It is my goal to provide you with superior service at all times.
Learn About Me
"VOTE NO ON 4" - www.Florida2010.org
Q&A clears the air about homebuyer tax creditsMcLEAN, Va. – Nov. 25, 2009 – If you’re in the market for a home, the
world is your oyster. Interest rates are at record lows. Housing prices in
many parts of the country are still depressed. And you may be eligible for
a generous tax break, even if the home you buy isn’t your first.
On Nov. 6, President Obama signed legislation that provides a $6,500 tax
credit for some current homeowners who buy another home. The law also
extends the $8,000 tax credit for first-time homebuyers, scheduled to
expire Nov. 30, until next spring.
A lot of people are interested in taking advantage of this tax break, but
the expanded credit also has whipped up a lot of confusion. Here are some
answers to frequently asked questions:
Q: How do I qualify for the $6,500 credit?
A: This credit is available for homebuyers who sign a binding contract on
a new or existing home by April 30, 2010, and settle by July 1 (deadlines
that also apply to the first-time homebuyer credit). You must have lived
in your existing home for five consecutive years out of the last eight.
The home you purchase must be your primary residence. However, the law
doesn’t require you to sell your old home, says Bob Meighan, vice
president at TurboTax, the tax software provider. You can use it as a
second home or a rental and still claim the credit, he says.
Q: I sold a home I had lived in for more than five years and bought a new
one in August. Do I qualify for a tax credit?
A: No. For existing homeowners, the $6,500 credit is limited to homes
purchased after Nov. 6.
Q: Does the home I buy have to be more expensive than the one I own now?
A: No. While the real estate industry is hopeful that homeowners will use
this credit to buy a nicer place, there’s no prohibition against using it
to downsize, Meighan says. That makes this credit particularly useful for
seniors who are interested in moving into a smaller home.
If you are planning to move up, keep in mind that you can’t claim the
credit if the purchase price of the home exceeds $800,000. Unlike some
other tax credits, this one doesn’t slowly phase out once you exceed the
threshold, Meighan says. If you buy a home for more than $800,000 – and
that refers to the purchase price, not the assessed value or the amount of
your mortgage – you are ineligible for the credit, period.
The $800,000 cap also applies to first-time homebuyers, but only those who
purchase a home after Nov. 6. First-time homebuyers who bought a home for
more than $800,000 between Jan. 1 and Nov. 6 can still claim the credit,
assuming they meet the other criteria, Meighan says.
Q: I’m an existing homeowner, and would like to build a new home. Can I
claim the credit?
A: Yes, but make sure your builder is good at meeting deadlines. You can
claim the credit as long as you have a binding contract in place by April
30 and close by July 1. In the case of a new home, the closing date is the
day you move in, Meighan says. If your home isn’t habitable by June 30,
you won’t be able to claim the credit, he says.
Q: I bought a home in 2008 and claimed the old $7,500 first-time
homebuyers credit, which must be repaid over 15 years. Did the new law
change that rule?
A: No. That credit, which was available for homes purchased between April
9, 2008, and Dec. 31, 2008, must still be repaid.
The $8,000 first-time homebuyer credit, available for homes purchased
after Dec. 31, 2008, doesn’t have to be repaid as long as you remain in
the home for at least three years. Existing homeowners who qualify for the
$6,500 credit don’t have to repay that money, either, as long as they meet
the three-year requirement.
Q: We have a rental home and would like to sell it to our son, who has
never owned a home. Would he qualify for the first-time homebuyer credit?
A: No. The legislation specifically prohibits taxpayers from claiming the
credit if the sale is between “related parties,” Meighan says. A home sale
to a parent, grandparent, child or grandchild would fall into that
category.
Q: I sold my home this year and have been renting since. If I buy a new
home, do I qualify for the expanded credit?
A: Yes, as long as you meet all of the other requirements, says Mel
Schwarz, partner with Grant Thornton in Washington, D.C. The eight-year
period used to determine eligibility ends on the day you buy your new
home, he says.
Copyright © 2009 USA TODAY. All rights reserved
Learn More About RE/MAX, Click : www.remax.com/rsn/reach.asx
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A portion of the proceeds we receive from each sale is donated to the Children's Miracle Network.
