Investing into a home or condo is a big step.  The members of the National Association of Realtors, or REALTORS, encourage you to ask questions and be completely informed about the homebuyer tax credit. This credit makes it an opportune time to finally make the transition from renting to owning.  Feel free to contact me, Brents Herron, with any questions regarding this credit or the Oxford, MS Condo market.
Here are a few pointers to help inform you about this great opportunity:

Who is eligible for the first time home buyers credit?

First-time homebuyers who purchase a primaryresidence on or after april 9, 2008 and before april
30, 2010 are eligible. If you (and your spouse,if married) have not owned a primary residence for a 3-year period before your purchase, andyou have never taken advantage of the DC firsttime
homebuyer credit.

Starting November 7, 2009

Buyers who have lived in their primary residence for fiveof the last eight years can also qualify for a tax credit. the credit for repeat buyers also expires April 30, 2010.*   

* current law allows potential buyers who enter into a written
binding contract by april 30, 2010 to close by June 30, 2010
and still claim the credit.

How exactly does this work?

It works just like any other tax credit, it is a direct redction of the total amount of taxes you owe.When you file your taxes, for the year you purchased your home, you will be able to subtract the amount of  the credit from your Federal income tax liability, increasing the size of your refund or reducing the  amount you owe.  Say you owe $4,000 in taxes, your taxes could be reduced by up to $8,000, which means Uncle Sam now owes you an extra $4,000.

How big is the Tax Credit?

It is equal to 10% of the purchase price of your home up to $8,000 for first time home buyers and up to $6,500 for others.

For individual filers, the credit starts to phase out at $125,000. COntact me for a detailed chart about exactly how much credit is available to you.

For married couples,  the credit starts to phase out at $225,000.  Contact me for a detailed chart about exactly how much credit is available to you.


What else should you know about the Tax Credit?

• Income limits for both credits have been raised, to qualify,the purchase price of the home cannot exceed $800,000.If you sell your home within 3 years of purchase, the entire
  amount of the credit is recaptured, that is, the government
  takes it back.
   

• Dependents do not qualify.

• Other tax benefits of homeownership are still in place including:the mortgage interest deduction, capital gains tax exclusion, and property tax deduction.

• Home purchases between relatives and other gifts of residences are not eligible for the credit.
   

• A primary residence is generally considered to be where an individual spends mostof his/her time. This includes single-family detachedhomes, condos or co-ops, townhouses or any similar type of new or existing dwelling.
   

Conclusion:

This is jsut a summary of some of the key points of this credit.  Check with the state housing finance agency as well as your lender for more details regarding your specific case.  Also, feel free to call or email me anytime with further questions.