Part 3 Debunking the tax credit Myths

You know how you receive those lovely thick pieces of hard to open Junk mail that say in bold big letter, “TIME SENSITIVE ” well this is your online version of that but it really is TIME SENSITIVE, so in an attempt to wrap this topic, up here we go.

Tax Credits are a wonderful way for saving money on that dreaded tax bill but there is still much misinformation out there. This will be my third and final attempt to seperate the fact and fiction surrounding the tax credit for New home buyers. We have addressed some of the other questions in prior articles but there are a few myths that remain. . . So we will try to stick to “just the facts Ma’am”

Myth #1 To qualify it has to be a house.
NO, a home is different for everyone and the only definition that need apply for a home is a residence. With that in mind then you may purchase a detached single family, a duplex, townhome, condominium, pre-manufactured home (mobile home) and even a house boat!!! The only restriction that the program requires is that you are not able to buy a home from your parents, children,grandchildren or spouse. In other words it must be an “Arms length transaction”

Myth #2 I have to fill out loads of paper work before I even purchase my home.
There is no paperwork to file ahead of time to receive the credit. You just need to fill out the IRS tax form 5404 when filing your income tax return. Then, follow the instructions on the tax forms. Again, as in all things, discuss your personal situation with your lender and he will guide you through the process.

Myth #3 I have to buy an existing home.
NO absolutely NOT. This one is timely right now however and if a home is not already started you may be pushing the envelope a bit. Remember you must close on or before November 30, 2009. You are allowed to apply the tax credit for an existing home or a newly constructed home. If you own a lot and construct your home yourself, or with a builder, your date of ownership is considered to be the date you first occupy the home. For homes that are built by a developer/home builder, eligibility is determined by the settlement date. I have one couple doing this but the home was already started so borrowing any acts of Nature then they should be just fine.

Myth #4 I must be a US citizen to utilize this program.
An alien resident who has not owned a home in the past 3 years, and is within the income limits, may also claim the tax credit if he meets all other requirements.

For space and time and my writing skills we can not address every issue that comes up but his should get you started. Please discuss this with your Realtor, banker and accountant to see what best fits you. Hopefully if you are looking forward to the credit to help buy your home you have already started the journey and if not what are you waiting on???? Get on your boogey horse and GOOOOOO.

Episode #17 – 3 BR Condo on the Gulf $229k

This week’s features:

Deal 1 – 3 Bedroom Condo on the Gulf for only $229,000
Deal 2 – Townhome on Thomas Drive for $169,900
Deal 3 – Wild Heron Bungalow BACK ON THE MARKET only $302,500!

The Beach Show is your ONLY internet TV show all about Real Estate on Panama City Beach.

Remember, it doesn’t cost anything to work with us if you are a buyer.

Click the “more” tag for show notes and pictures.

Call us at 850-527-5651 to see these properties or for anything else you need regarding real estate in Panama City Beach.

Show Notes

Deal 1 – 3 Bedroom Condo on the Gulf for only $229,000

List Price: $229,900
Square Feet: 1,560
Price/SqFt: $146.79
3 Bedrooms, 2 Bath
Built in 1984
Regency Towers is among my favorites. Having recently gone through a total overhaul under new management, this timeless classic is beautiful and the host to some really great real estate deals. This particular condo is on the west side with an enormous unobstructed new of the Gulf and is in great shape. Altough it is bank owned, it didn’t look like it needed anything except new furniture and floors. This is a steal and a must see!

Deal 2 – Townhome on Thomas Drive for $169,900

List Price: $169,900
Square Feet: 1,565
Price/SqFt: $108.56
2 Bedrooms, 2.5 Bath
Built in 2005
This awesome townhome has never been lived in and is located right on Thomas Drive (set back quite a bit) amonth several others just like it. There is a community pool. Providing peeks of the Gulf of Mexico, this town home is only steps from the beach and spacious enough to live in or use as a rental. This price is a steal with new everything!

Deal 3 – Wild Heron Bungalow BACK ON THE MARKET only $302,500!

List Price: $302,500
Square Feet: 2,180
Price/SqFt: 138.76
3 Bedrooms, 2.5 Bath
Built in 2006
This listing was hot on the market a few weeks back and was snatched up quick. But, it’s back on the market and ripe for the picking. This is a bank-approved short sale and ready to close. If you are looking for a high quality of life in a luxury community with TONS of amenities including free kayak rentals, fitness center, pools and tons of beautiful scenery, this is the place for you. This home is super nice and an absolute steal at this price. You could not build this quality at this price. You have to see this home.

Call us at 850-527-5651 to see these properties or for anything else you need regarding real estate in Panama City Beach.

Let's Clear the Confusion – Home Buyer Tax Credit

I always share as I write that I am not an expert and I do not even play one on TV so I want to make some of last weeks article a little more clear if I can. As my husband says, “lets see if we can make this as clear as mud” There is still confusion surrounding the tax Credit with the emphasis on CREDIT and not deduction. Please take my limited knowledge and run straight to your banker and your favorite Realtor and see what you can come up with. I have borrowed some examples that may apply to you and have consulted again with my banker friends that are wiser than me.

A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference
In the case that you owe $4,000 in income taxes at the end of the year you would pay nothing to the IRS and and receive a $4,000 payment from the government.
If you are due to receive a $1,000 tax refund from the government, your refund would grow to a whopping $9,000. ($1,000 plus $8,000 from the home buyer tax credit)
If your final tax liability is $6,000, but you’ve underpaid through your payroll witholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.

Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)

This is short and sweet this week so you will have time to run on down and get all your ducks in a row so you can get that house. I like to think of this as a little house warming present. Some of my buyers are looking at it as a discount so to speak on their home and with money being tight that is a welcome and one more reason to purchase their first home. I will leave you with some resources that may help you clear up the process and navigate you to a successful purchase.

First-Time Home Buyer Tax Credit information from the IRS.

State Housing Agencies with programs that provide short-term loans that may be used to fund a downpayment in conjunction with the tax credit.

Buying and Owning a Home Freddie Mac

Buying a Home Department of Housing and Urban Development

Buying and Owning a Home Freddie Mac

Buying a Home Department of Housing and Urban Development

The Home Buying Process Federal Housing Administration

FHA Loans Federal Housing Administration

Homeownership Resources Fannie Mae

NOTE: Please know that much of this knowledge is general in nature and your local lender will let you know what is available in your location.