New Construction: First Time Home Buyer Tax Credit

For those of you that are unaware, the Worker, Homeownership, and Business Assistance Act of 2009, aka “the First-Time Home Buyers Tax Credit” has once again been extended to April 30, 2010. If you are spending money on advertising, I do hope you are including this opportunity in your marketing campaign. While it has been extended a couple of times, there is no guarantee it will be extended again.
I would like to bring to your attention some of the finer points of the act.
• The law defines a “first-time home buyer” as a buyer who has not owned a principal residence in the past 3 years. I bet you didn’t know about that 3 year part, did you?
• The home can be a new home or a resale, but it has to be their principle residence. It cannot be a 2nd home or vacation home.
• The tax credit is not automatically $8,000 as many people think. It is 10% of the home’s purchase price up to a maximum of $8,000.
• There is an income limit for your buyer(s) as well. For a single person it is $125,000 and for a married couple filing a joint return it is $225,000.
• To receive the tax credit, you will claim the tax credit on your federal income tax return.
• The purchase price of the home cannot exceed $800,000. Friends, this is not a typo. There’s nothing about the first time home buyers fleet of Mercedes fitting in the 4 car garage, so we should be good here…

Nevertheless, this is an opportunity that you should not let slip by. April 30th will be here a fortnight after your taxes are due. Take advantage, everyone else is.

PS. If your buyer signs a contract to build a new home with you prior to April 30, 2010, this is okay, as long as the home is completed and delivered to your buyer prior to June 30, 2010. Better make hay.

Stuart Winston
www.mycontractorslicense.com