If you’re planning on taking advantage of the existing $8,000 First-Time Home Buyer Tax Credit program, you should buy within the next six weeks.
The program expires November 30, 2009, and since closing on a Lakeland home can take up to 60 days – you may miss the mark if you wait too much longer to sing a home purchase contract.
By my calculations, you have about 6 weeks left before you miss the Tax Credit window.
The First-Time Homebuyer Tax Credit – A Short History
The First-Time Homebuyer Tax Credit program was passed as part of the 2009 economic stimulus plan. It credits up to $8,000 in tax payments to qualified buyers.
Lakeland real estate buyers must meet the following criteria to qualify:
- You must not have owned a “main home” in the past 36 months
- Your Lakeland home may not be purchased from a parent, spouse, or child
- Your adjusted gross income (AGI) for your total household must be below $95,000 for single tax filers and $170,000 for joint tax filers
Additionally, you may not qualify for the entire tax credit. This is because the credit can’t exceed 10 percent of your selected home’s purchase price. Homes with income approaching program limits get lesser benefits, too.
Figuring What You’ll Get Back via the Tax Credit
Know that the First-Time Homebuyer Tax Credit represents a true tax credit and not a deduction.
So, if you qualify for the whole $8,000 credit and have a standard tax liability of say, $5,000 – you’d receive back $5,000 or whatever had been withheld for federal income taxes plus an additional $3,000 from Uncle Sam when your tax return is processed by the IRS.
Review the program’s criteria as your time permits, but don’t sit on the fence too long. If you can’t close on your Lakeland home by November 30, 2009, you won’t qualify for the tax credit.
Better to be ahead of the deadline than chasing it.