Buy a House Fast

Did you buy a home last year or are you are planning to buy now?  Either way, there are some important things to remember about the home buyer tax credit.

What You Might Know

• The credit applies to you if are a first time buyer or a repeat buyer.  You are considered a first-timer if you have not owned a home in 3 years. First timers can qualify for up to $8,000, while repeat buyers can receive up to $6,500.
• You must have a signed sales contract by April 30 and have your closing on the property by June 30 in order to claim the credit (If you are in the military or foreign service, you have an extra year).
• The home you buy must be your principal residence. If you are a repeat buyer, you don’t have to sell your old home, but you can rent it out or turn it into a second home while using your new home as you primary home.

For a complete summary of all criteria, see the official site.

What You May Not Know

• Unless you applied all or part of your credit to your down payment or closing costs, you will receive your funds after you have filed your taxes.
• To claim the credit, you must submit a copy of the HUD-1 settlement statement and IRS Form 5405 to claim either the first-time home buyer tax credit or the repeat home buyer tax credit.
• You can claim your refund with your 2009 return, amend it if you have already filed, or save it for your 2010 return.
• To claim the credit, you cannot E-file. You must mail a paper return because you have to send some supporting documentation (proof of residency, a signed mortgage statement and drivers license) along with the return.  If you use online tax software like TaxAct, you can use their forms but still must print them out and mail your tax return to the IRS.
• It may take up to four months to receive your refund.

Before you blast the IRS for gross inefficiency and inflicting mental cruelty, blame your fellow citizens who tried to scam the government. The rules were changed with the November 6, 2009 extension to prevent fraud.

Despite the wait, the money is a good incentive to buy a home. Express Realty Services has a great selection of pre-owned homes in the greater DC area. Visit our website to find your next home in Maryland, Virginia, or DC.  Many are newly renovated and ready for you.

U.S. homeowners recently were handed an early holiday gift by Uncle Sam when the first-time home buyer credit was transformed into the Home Buyer Tax Credit, applicable to both first timers and certain repeat buyers.  As homeowners unwrap the details, the gift keeps on giving.

Happy Holidays, Repeat Buyers: Home buyers who have lived in a home they owned as their primary residence for at least five of the last eight years qualify for $6,500, while those buying a home for the very first time or for the first time in the last three years receive up to $8,000 as before.

A Happy New Year (or at least a few months of it): To qualify, you must have a signed contract in place by April 30, 2010, but the closing can be delayed until June 30, 2010.  The leeway gives you two months to close, which should be enough time to solve even the stickiest financing or appraisal issues.  This setup is also handy if you want to buy a short sale property, are having a house built, or even want to delay the closing until the school year is over.  The extra time gives the gift of flexibility to every buyer.

Choose where you will use your gift card: The credit is good for any type of principal residence – a home, condo, townhouse, mobile home, or even a houseboat – sold for up to $800.000.  Second homes or investment properties do not qualify, although if you turn your current home into a second home or a rental and buy a new primary residence, you are able to claim the credit.  The tax credit does not have to be repaid as long you remain in the home for three years or more.

More Jingle?  You still qualify: This time around, the income limits to qualify for the credit are higher.  Single taxpayers can earn up to $125,000 to gain the full credit, while joint filers can earn up to $225,000.  Those who make up to $20,000 over the limit can receive a percentage of the credit.  For a married couple to qualify for the first-time buyer credit, neither one can have owned a home in the past three years to get the $8,000 credit but the couple can qualify for the repeat buyer’s credit if one has owned a home.  The income provision, as well as the credit for repeat buyers is not retroactive.

Bonus Gifts for Uncle Sam’s Favorite Sons and Daughters: This time around, special consideration is being given to the military personnel.  Members of the military serving on extended official duty away from home for more than 90 days have an extra year to qualify for the credit and are not subject to the repayment clause if they have to move in less than three years.  These terms apply to all members of the uniformed services of the U.S military, members of the Foreign Service of the U.S., or employees of the intelligence community.

Want to maximize your gift? Express Realty Services has a full stock of “gifts that keep on giving,” the joy of home ownership throughout the year. Aside from our featured listings, we have a special stock of renovated, refurbished, and remodeled homes from our sister company Express Homebuyers.