Tax credit costing home buyers
Real estate agents weigh in
BATON ROUGE, La (FOX44) -- If you cashed in on the first time homeowner's credit within the last two years, you might have to pay it back.
Real estate agent, Janet Anderson, has had a few complaints about a tax credit meant to help first time home buyers. Some of her clients took advantage of the tax credit a few years back, thinking they were saving up to $8,500 on their new homes. It was money they didn't think they'd have to pay back.
"It was a great tool to allow people to be able to get into home ownership," says Anderson.
Normally, that tax credit doesn't have to be paid back, but there's a catch. When those clients thought about moving, the credit came back to haunt them. "They're having to make the decision to stay put now," says Anderson.
According to the rules of the 2009/2010 tax credit, the house has to be the home buyer's primary residence for three years. "To stop being your primary residence, you would either have to sell your home, convert it to a business or rental property, if you get foreclosed on it, or if you have damaged the home and haven't repaired it within two years," says real estate agent, Scott Gaspard.
If one of those things should happen, the home buyer gets stuck paying the full amount of credit back by the next tax season. "They are either unwilling or unable to pay back that tax credit," says Anderson.
It's a rule most didn't know about. "I think there were a lot of people who don't realize it was a requirement," says Gaspard. That's why he says people need to know what they're signing before it's too late. "Before saying yes to the benefit, check to see what strings are attached," says Gaspard.
There was a similar tax credit available in 2008. If you took advantage of that one, you will have to pay back the credit in full over a 15-year period, regardless of how many years you stay in the same home.
You can learn more about the tax credit at http://www.irs.gov/newsroom/article/0,,id=206293,00.html
If you have questions, you can also contact the local IRS office at (225) 343-8625 or you can visit their office at 2600 Citiplace Centre between 8:30am and 4:30pm Monday through Friday.
Real estate agent, Scott Gaspard, suggests contacting your local IRS office or your Certified Public Accountant for more information.
If you'd like to get in touch with Scott Gaspard, you can reach him at (225) 337-4663 or at firstname.lastname@example.org
If you'd like to get in touch with Janet Anderson, you can contact her at (225) 368-3237
Check out her website at http://www.artofhomeselling.com/