Not Too Late For The Tax Credit

You've probably heard about the real estate tax credit that is to be given to first time home buyers. It is not too late for you. You must buy before November 30, 2009 to be eligible for the 10% of the value of the home tax credit, up to $8,000.

A tax credit is different form a tax deduction. A tax credit is equivalent to money in your hand, whereas a deduction only reduces your taxable income. To illustrate: A first time buyer buys a home for $80,000. (Yes, that is possible here in Columbus Georgia to buy a nice 3 bedroom 1 bath home for that price.) If the the first time buyer owed $4,000 in income taxes, he can offset that $4,000 with half of the tax credit and receive a check for the remaining $4,000!!! (This is a general example. You should consult your tax advisor for information relating to you specifically)

First time buyer couples must have an income of 150,000 or less and singles max out at 75,000. They will have to repay the credit if they sold their home within 3 years. (Military buyers should consult their tax advisers. There may be a special stipulation for them.)

The tax credit is applicable to any home that will be used as a principal residence. Qualifying properties include single-family detached homes, townhouses, and condominiums. Manufactured homes and houseboats used as a principal residence also qualify.