Vail Valley: First-time home buyers need to act fast
The First-time Home Buyer Tax Credit is coming to a close at the end of this month. Any first-time home buyer should be sure to schedule their closing on or before Nov. 30 2009 to take advantage of this unique opportunity for tax savings. The American Recovery and Reinvestment Act of 2009 provides a tax credit equal to 10 percent of a home’s purchase price up to $8,000 for qualified first-time buyers purchasing a principal residence before Dec. 1. The tax credit is not a tax deduction, but a dollar-for dollar reduction in what the taxpayer owes. The credit is even refundable if the buyer’s tax liability is less than the credit. The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the home ownership history of both the home buyer and their spouse. There is no application or pre-approval required for the credit – you simply claim the tax credit on your federal income tax return. You will, however, want to be sure that you qualify for the credit under the first-time home buyer and income-limit tests. The income limit for single taxpayers is $95,000 and $170,000 for married taxpayers filing a joint return – however, the credit is scaled back for individuals making more than $75,000 or married couples making more than $150,000. Any home that will be used as a principal residence will qualify for the credit, including single-family, duplex, townhome and condominium properties. The credit never has to be repaid, but home buyers must use the residence as their principal residence for at least three years or face recapture of the tax credit amount. Being under contract to purchase before the Nov. 30 deadline does not qualify you for the program – you must close on the purchase. If you are a first-time home buyer in the market for a new residence, you may want to fast-track your search in order to take advantage of this unique opportunity for up to $8,000 of “free money” courtesy of the American Recovery and Reinvestment Act.The Vail Chamber & Business Association is the leading business advocacy group in Vail and is a communications outlet for businesses that want to have a voice in community affairs. If you are interested in finding out more about the Vail Chamber and what it has to offer, call 970-477-0075 or e-mail firstname.lastname@example.org. Based in Vail Village, our office is located in the transportation center and our doors are open Monday through Friday from 9 a.m. to 5 p.m. Stop by and say hello!Paul Wible is Executive Vice President of FirstBank of Vail and a member of the Vail Chamber & Business Association Board of Directors.