Realtors hopeful of new tax credit

Published 9:06 pm Wednesday, February 18, 2009

Kendra Bolling

Local realtors are optimistic the new first-time buyer tax credit, which was passed as part of the $787 billion stimulus bill President Barack Obama signed into effect Tuesday will be helpful in the Pike County market.

“We’re excited about it,” Mary Shirley of Mary Shirley Realty said. “We have a lot of first-time home buyers.”

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“It’s one of the most important part of the stimulus because it is a true tax credit,” Adam Drinkwater, a realtor at Landmark Realty said.

While the tax credit is a smaller amount that the original $15,000 proposal, the credit is equivalent to about 10 percent of the purchase price of a home, but is capped off at $8,000.

The previous homebuyer credit was valued at $7,500, but was more of a loan than a credit, the new one, however, does not have to be repaid.

According to the legislation, a first-time homebuyer is someone who has not owned a principal residence during the three years prior to buying a house.

Shirley said first-time homebuyers are a good part of the Troy housing market.

Prospective homebuyers shouldn’t wait around long because there is a timeline.

To be eligible, the purchase has to be made between Jan. 1, 2009 and Dec. 31,2009.

“This is certainly of interest to people who have been considering buying a new home in these times,” Drinkwater said.

Although the tax credit it geared toward first-time homebuyers, there are income stipulations that buyers are subject to.

Single buyers need to have an adjusted gross income of less than $75,000 in order to qualify for the full credit and $150,000 for married couples.

Those earning more than this may still be eligible for reduced credits.

Another stipulation is buyers must own the home for at least three years in order to capitalize on the credit.

If buyers sell the home before the specified time period, they will have to return the credit to the government.

While it may be too early to tell the definite effects the bill may have, Shirley said her company has several potential homebuyers with appointments and some that are waiting on the bank.

“I think (the tax credit) will help them,” Shirley said.

According to Drinkwater, the bill has more than 1,000 pages for realtors to go through, and they are still trying to find out how it may affect homebuyers.

“There are a lot of uncertainties,” Drinkwater said.