Good news if you’re thinking of buying real estate in Georgia…Governor Sonny Perdue signed House Bill 261 yesterday (May 11) providing an $1,800 tax credit on home purchases during the next six months.
The state tax credit, which would be taken over three years, takes effect on June 1, 2009 and is available on single family residences including condos and foreclosures. The amount of the credit is $1,800 or 1.2 percent of the purchase price, whichever is less. You can claim one-third of the credit available in each taxable year, and may carry forward unclaimed amounts.
Plus, there are no income restrictions and you don’t have to be a first time home buyer to receive the new $1,800 tax credit. It’s available to all buyers who close by Nov. 30, 2009. Find out more.
Federal Tax Credit vs. State Tax Credit
If you’re a first time home buyer, you may be eligible for the federal tax credit too – 10 percent of the purchase price of a home up to $8,000. The federal tax credit is available only to first time home buyers. However, keep in mind, the government defines a first time buyer as someone who has not owned their primary residence during the last three years, so you may still be eligible if you own an investment property.
To be eligible for the $8,000 tax credit, you must close on your home by Nov. 30, 2009 and not make more than $75,000 per year (as an individual) or $150,000 per year (as a married couple).
The $1,800 state tax credit is meant to spur activity in the housing market just like the $8,000 home buyer credit is doing. In fact, a preliminary report by the Treasury Inspector General for Tax Administration, which looks at 56.9 million tax returns received through March 6, revealed that 567,685 households claimed the tax credit. If those trends remain steady for all 140 million tax returns the IRS expects this year, about 1.4 million households will claim the first-time homebuyer tax credit in 2009.
All of this is great news for the housing market and the economy. This bill gives buyers an extra incentive to buy and reduces the amount of inventory of unsold homes – both are needed to help kick start the economy.
Other legislation passed
A two-year freeze on all property reassessments. This law gives homeowners protection during an economic strife by keeping property values from rising when the real estate market is down.
Questions / Thoughts?
If you have comments or questions about the new $1,800 tax credit or the $8,000 home buyer credit, write your comment below. You may also want to look at attending a seminar on these tax credits.