Charleston SC First Time Homebuyers will benefit from Revised Tax Credit

Charleston SC Home Sales set to increase after President Obama signs off on new stimulus package which includes a tax credit for first time home buyers. The tax credit has been improved to increase the credit from $7,500 to $8,000 and now it does not have to be paid back. Charleston Area Real Estate Market will see improvement as first time buyers are lured into the market.

The Stimulus Plan was signed into law by President Obama today. It contains a new tax
credit for first-time homebuyers. Essentially, first-time homebuyers within certain
income limits who purchase a home in 2009 before December 1, 2009 will receive a tax
credit of up to $8,000. The program is similar to the $7,500 tax credit which applied to
home purchases made in 2008 after April 9. A comparison of the two credit programs is
outlined below.



While the Stimulus Plan was still being debated, the Senate version originally included a
$15,000 tax credit for all homebuyers. To lower the cost of the Stimulus Plan, the final
version of the Plan contained this smaller tax credit, and this tax credit is applicable
only to first-time homebuyers.



To qualify as a first-time home buyer as defined in the programs, the purchaser (and the
purchaser's spouse) may not have owned a home in the three years prior to the purchase
date of the home. Single family homes qualify for the program. The home must be the
primary residence.



Both tax credits are subject to the same adjusted gross income limitations (full credit
for AGI less than $75,000 single/$150,000 joint, phased out for AGI up to $95,000 single/
$170,000 joint).



The amount for either credit is the lesser of 10% of the home purchase price or $7,500 or
$8,000, as applicable.



While a purchaser still owns the home, the $7,500 credit must be repaid in equal payments
over a period of 15 years, starting with the 2010 tax filing. The $8,000 credit will not
need to be repaid. Again, the $7,500 credit needs to be repaid, while the $8,000 credit
does not!



Upon sale of the home, any portion of the $7,500 credit not yet repaid is due in full. A
No portion of the $8,000 credit is due upon sale of the home, if the home is owned for
more than three years. If the home is sold within the first three years, the full amount
of the credit is due upon sale.



The $7,500 credit was not available to any purchaser utilizing state/local revenue bond
money to help finance the home purchase. There is no such restriction on the $8,000
credit.



Under both the $7,500 and the $8,000 programs, the credit will be claimed on the
purchaser's income taxes. Any amount in excess of taxes owed will be refunded to the
purchaser.


Additional information about the tax credit can be found on the websites of the National
Association of Realtors (www.realtor.org<http://www.realtor.org>) and the National
Association of Home Builders (www.nahb.org<http://www.nahb.org>

This article was provided by Todd Morgan of Bradford Mortgage Company

EXIT Realty Charleston Group A full service Charleston Area Real Estate Brokerage with 4 offices located in the Goose Creek, Mount Pleasant, Sullivan's Island, and West Ashley Areas of Charleston SC. Services include residential sales and property management including long term and vacation rentals, and commercial sales and leasing.