What’s New About the First-Time Homebuyer Tax Credit

February 19th, 2009 Categories: Real Estate

CROFTON REAL ESTATE NEWS BULLETIN

Crofton area homebuyers are enjoying a buyer’s market, record-low interest rates, and now a tax credit from the federal government. The primary difference between today’s tax credit and the one I wrote about in Some Crofton Homebuyers Eligible for $7500 Tax Credit (January 9, 2009) is this: it’s a gift, not a loan.

There are other differences, as well:

SOURCE: National Association of REALTORS

ANOTHER TAX BENEFIT OF HOME-OWNERSHIP:

My daughter recently completed her tax return for last year and found that she would not only receive the $7500 tax credit/loan for buying a home last year, she would get more than a $2,000 refund. That’s because homeowners can deduct all the interest on their mortgage and their property taxes, as she was able to do for part of the year.

For example, let’s pretend you purchase a Crofton-area condo with a loan of $250,000. Your interest rate is 5% and your annual property taxes are $2400. That would give you almost $15,000 of income-tax deductions you don’t have as a renter. If you’re in the 28% tax bracket, that could mean a savings of more than $300 PER MONTH in federal and state income tax. (Check with your accountant for numbers that accurately apply to your own personal financial situation. These numbers do not apply to everyone.)

With a mortgage payment of about $1500 (Principal and Interest combined) and a monthly tax savings of more than $300, your net monthly payment would be about $1200 – probably the same or less than your monthly rent.

Then, when you file your 2009 taxes, you apply for the new tax credit which is part of the recent stimulus package - and you’ll ALSO get that “gift” of $8,000.

If you’re currently renting, you owe it to yourself and your family to take advantage of this once-in-a-lifetime situation. CONTACT ME TODAY to learn about the three easy steps for going from renter to home-owner.