The $8000 Tax Credit Doesn’t Mean You Get $8000
By Cindy Jones on March 29th, 2010Recently an addendum to a purchase agreement on one of my listings in Northern Virginia caught my attention. The addendum stated if the home did not settle by the June 30, 2010 deadline the sellers would credit the buyers with $8000, the amount of the First Time Homebuyers tax credit.
After reading the addendum a few times I realized the buyers were under the impression that anyone who purchased a home prior to the upcoming May 1, 2010 deadline believed they would get $8000. In reality, there are calculations regarding income and if there are multiple buyers purchasing the home there are additional requirements to be met as well. Not everyone is eligible for the full $8000 and though in our area most homes by virtue of their price qualify not all buyers qualify.
The words UP TO $8000 are often left out of the headlines announcing the tax credits. As a result some buyers may have rushed to buy a home thinking they were going to get $8000 next year in tax credits next year from the IRS. Though the tax credit is a nice incentive for purchasing a home, understanding that you may not qualify for all $8000 is important.
Right now homes are a good value in Northern Virginia with or without a tax credit. If you are looking for a home to purchase by the upcoming April 30, 2010 contract deadline make sure you understand how the tax credit works for you. As a Realtor® I can help you understand the basics of the First Time Homebuyers Tax Credit and find the home that is right for you but a tax professional is the one who can tell you whether the credit you may be expecting is reality.
Cindy,
I haven’t seen that language in any addendum yet, but as the deadlines rapidly approach, I wouldn’t put that past most buyers.
Of course, we have very few homes priced under $80,000 in the D.C. area, so most people who DO QUALIFY for the credit will get the entire $8K.
There were a number of questions that came up when looking at the addendum and back at the contract. There were a number of other parts of the offer that made it appear that the buyers (double set) would have potential issues with qualifying for the full 8K.
I’m with you and wonder if we will see a trend to try and make the sellers cough up more concessions if for some reason a deal doesn’t close in time.