$8,000 homebuyers' tax credit

September 16, 12:49 PMBaltimore Community ExaminerPamela Mones

I have been working with a lot of people who are hoping to buy their first home but are either unaware of the tax credit available to them as first-time homebuyers, or they are confused by what it means to them.

Right now, the most important thing for first-time homebuyers to know is that the tax credit for buying their first home is scheduled to go away as of Dec. 1, 2009.  Because of many changes to regulations governing real estate transactions over the past several  months, the length of time it takes from submitting an offer to sellers and getting to settlement has increased. The average time lenders are telling us is between 45 -60 days. If you do the math, you see that Nov. 30 will be here sooner than you might think.

We are told that first-time homebuyers, hoping to take advantage of this stimulus money, should expect to submit an offer on a home no later than the end of this month, September, to give them enough time to get to closing and be eligible for the tax credit.

While there is some talk about extending the timeline for the credit, the future of it is uncertain. A real estate transaction is not something to rush into, however if you have been sitting on the fence about purchasing a home, now is the time to take action.

Below is a summary of the tax credit issues contained in  the American Recovery and Reinvestment Act of 2009.

$8,000 Home Buyer Tax Credit at a Glance

The tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.

The tax credit does not have to be repaid.

The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.

Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

The information on this page pertains to the American Recovery and Reinvestment Act of 2009. For more info: www.federalhousingtaxcredit.com; www.longandfoster.com

Please contact me if you have any questions about the tax credit,  or other real estate questions, at prm@dmv.com