Taking a Close Look at the Homebuyer Tax Credit

( Reposting this from our Intero corporate blog, and authored by our illustrious Gino Blefari).

The much talked about American Recovery and Reinvestment Act of 2009 – otherwise known as the “Home buyer tax credit” – expires on December 1, 2009.

That’s just a little over three months from now - not much time when you consider that the average buyer takes six to eight weeks just browsing online for homes before even contacting a Realtor.

What’s more, we are seeing increasing signs of a market bottom. According to Altos Research, a firm based in the Silicon Valley that tracks real estate data, median sales prices for San Jose, Saratoga, Los Gatos and Cupertino all increased in the first week of August.

At Intero, we sold more than 900 homes in July – a one-month record for our company.

My point: If you are thinking at all about buying, now’s the time to take a good look at the tax credit program to see if it makes sense for you.

The National Association of Realtors offers a comprehensive guide to the tax credit on their website, but here’s a quick overview:

• The credit is equal to 10% of the purchase price of the home, up to $8,000.
• First-time homebuyers who purchase homes between January 1, 2009 and December 1, 2009 are eligible. To be a “first-time home buyer” you or your spouse may not have owned a residence during the three years prior to your purchase.
• Single buyers with incomes up to $75,000 and married couples with incomes up to $150,000 may receive the maximum tax credit.
• The credit does not need to be repaid if you occupy the home you buy for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
  
  

Do your homework. Get advice from a legal or tax professional if you need it. But don’t let this landmark program expire without taking a closer look.