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Buyers of New Homes Need to Act Soon to Get Tax Credit
With only about seven months remaining before the $8,000 tax credit for first-time home buyers is scheduled to expire, home builders should be conveying the message that prospective buyers looking for a newly built home need to make decisions soon if they want to be able to take advantage of the federal incentive, according to NAHB.
“We have received many inquiries from potential home buyers asking if a sales contract on a new home by the Nov. 30 deadline will be sufficient to receive the first-time home buyer tax credit,” said NAHB Chairman Joe Robson. “They have been surprised to find out that they must complete the purchase of the new home before they are qualified.”
Home buyers may qualify for the tax credit if they purchase the home on or after Jan. 1 but before Dec. 1, 2009. A purchase occurs when the title to the home transfers, typically on the day of closing of the home sale.
In the case of an owner-built home, in which the eventual home owner does not purchase the home from a builder, the date the home buyer takes occupancy of the house is considered the purchase date.
In all cases, a signed sales contract is not sufficient to claim the tax credit.
Mike Dishberger of Sandcastle Homes, Inc., in Houston, said that building a home from scratch can take anywhere from four to six months, depending on the floor plan and location. “Builders are ready and willing to work with potential home buyers to get them into the new home of their dreams, but time is running out to make those dreams a reality while also benefiting from the $8,000 tax credit.”
“Buyers also need to keep in mind that it takes time on the front end to select a community, a builder, a floor plan and the options they want in the home before the first shovel hits the dirt,” said Kevin Enyeart of Gale Home Builders in Kansas City, Mo. “Often it can take up to a month to complete this process in order to ensure the customer is satisfied with the home they will be living in many years down the road.”
It is important that home buyers understand the time requirements and get the process started with a home builder today if they want their new home completed in time to claim the tax credit.
In addition to the Nov. 30 deadline, home buyers must also have not owned a home in the three years prior to the purchase and have a modified adjusted gross income (MAGI) less than $95,000 for single tax payers or $170,000 for married filers in order to qualify for the tax credit.
More information on the first-time home buyer tax credit can be found at www.federalhousingtaxcredit.com.
To find a local home builder, consumers can contact their local home builders’ association at www.nahb.org/findanhba.
Resources are also available to help educate consumers on the home building process at www.nahb.org/forconsumers.
 Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit — including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
Spanish Version Also Available Online
A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.
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