Congress Forces Rush to Buy First Minneapolis Duplex
said on February 12th, 2009 categorized under: Buying A Duplex, Legislation
According to the Los Angeles Times, yesterday’s compromise between the House and Senate versions of the stimulus package now features a $8000 first time home buyer tax credit.
While details have yet to emerge, and this has yet to be signed into law, this credit is significantly lower than the proposed $15,000 credit featured in the Senate’s version of the bill. What’s more, only first time home buyers are eligible for the break.
Unlike last year’s $7500 first time home buyer tax credit however, the $8000 does not have to be repaid. Properties purchased between January 1 and August 31, 2009 are eligible for the break.
As always, owner occupied single family homes, duplexes, triplexes and four-plexes are eligible for the credit.
Fair warning first time duplex buyers: you have to close on the property by August 31. It sometimes takes as long as 45 days to get a loan through final underwriting, a period which may be longer still if there is a rush of people trying to qualify for the tax break.
It would be wise to think of your deadline to have a completed purchase agreement as being no later than July 15, preferably July 1.
You have 4.5 months. The longer you wait, the more competition you’re likely to face from other buyers.
I can think of four duplexes right now that could be a terrific buys. Get in touch with me. I’d be happy to show you where they are.
I think I just hit the jackpot. I just bought a duplex on January 21st. My first home purchase. Will this $8,000 apply to 2008 taxes or would I need to wait until I file 2009 taxes?
You may well have hit the lottery. Now not only is the tax credit increased from $7500 to $8000, if you live in the property at least three years, it’s non repayable.
Best of all, according to a Wall Street Journal report (http://www.marketwatch.com/news/story/breaks-stimulus-bill-may-require/story.aspx?guid=%7BB1B0F1F8-62DC-4AFD-9F4B-EB9E07F3A007%7D&dist=msr_1), yes, you may take it off your 2008 taxes.
Is it still $8,000 lst time buyer credit if it is a single individual or is it cut in half to $4,000? Saw this on another website.
While I’m sure we’ll get all the details of the stimulus package next week, I have not seen this in any of the Congressional documents or information distributed by the National Association of Realtors.
My way of looking at and understanding the credit is it applies to the property. So, if one person buys the property, he or she receives a $8000 credit (provided s/he earns less than $75,000 a year; it’s phased out if there is more income).
If two people buy the home, they cannot earn a combined total of more than $150,000 to receive the full credit. They are each entitled to a $4000 credit (just because two people buy a duplex together doesn’t mean they necessarily file a joint return).
If three people buy the property, then the tax credit is split three ways, with each party getting a $2666.67 credit, and so on.
Of course, be sure to double check everything with your accountant as it pertains to your unique circumstances.
Good link but do not see any mention of a August 31 deadline, instead see December 1, 2009 deadline, Where did you see the earlier date published?
Here is where I saw the December 1 link.
http://www.federalhousingtaxcredit.com/
“A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid.”
Hey Dan,
Yes, the deadline is December 1. This blog post was when the info first came out, and Congress hadn’t made clear to all of us that they were pushing the deadline back.
It’s important to remember the December 1 deadline means “closed” by then. In other words, you have the key to the duplex. I’m anticipating a huge wave of closings in October and November, so it would be wise to get out ahead of it.
Thanks for pointing it out!
Kari