By Dustin Heron Urban

If you have been considering buying a home in South Main, the federal government just sweetened the deal. The American Recovery and Reinvestment Act, signed into law on February 17th, provides a tax credit of $8,000 for first-time home buyers. This new law contains a number of appealing provisions, but you must move into your new South Main home before December 1st of 2009 in order to be eligible. Particularly if you are considering a custom lot or a lot-plan package, you will need to start construction quite soon in order to move into your home by December 1st and be eligible for the tax credit. Call us today or submit a sales inquiry to set this process in motion.

Not sure if you’re eligible for the credit? Here are some basics (a comprehensive run-down of the law can be found on the National Association of Home Builders Website):

You must be a first-time home buyer. Technically you are eligible as long as you have not owned your primary residence for the past three years. And owning a property such as a rental does not disqualify you if it has not served as your primary residence.

You must earn less that $75,000 per year. In legal-speak, your modified adjusted gross income (MAGI) must be less than $75,000. For married couples filing jointly, your MAGI must be less than $150,000. If you earn more than this, you may still be eligible for a partial credit. Check the NAHB website or speak with your tax accountant for more details.

The tax credit is refundable, meaning that you can claim the full credit even if you have little income tax to offset. In other words, if you owe the federal government $3,000 in income taxes and you qualify for the credit, the IRS will send you a check for $5,000 ($8,000- $3,000). Additionally, qualifying taxpayers are permitted to reduce their income tax withholding up to the amount of the credit, allowing you access to the credit even before moving into your new home.

Please note that this article is for informational purposes only and should not be considered a substitute for advice from a qualified accountant or tax advisor.

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