Local News

First-time homebuyers: Act now for tax credit

Posted October 2, 2009 6:59 p.m. EDT

— First-time homebuyers looking to build homes and take advantage of an $8,000 federal tax credit need to act now, real estate developers say.

Homebuyers can qualify for the tax credit if they purchased their home on or after Jan. 1 but before Dec. 1.

In the case of new construction, however, the date a homebuyer moves into the house is considered the purchase date, not when the sales contract is signed.

Because new homes typically take four to five months to build, Carla Sevilla, with Centex Homes, said buyers need to begin the building process soon.

"I would say, by the end of July, they need to go ahead and purchase that new home they're looking for," Sevilla said.

The Internal Revenue Service defines a first-time homebuyer as someone who has not owned a home in the three years prior to purchase. The tax credit is equal to 10 percent of the home's purchase up to a maximum of $8,000 and is available to single tax-payers making less than $95,000 or married couples with a combined income of less than $170,000.

Centex is selling about 40 new homes a month in Raleigh because of low interest rates, aggressive pricing and the first-time homebuyer tax credit, she said.

"Affordability has never been better, and we're finding that a lot of people are taking advantage of it," Sevilla said.

Home sales, while down from a year ago, were slightly better nationwide in March that analysts expected. The total number of new-home sales decreased by 0.6 percent from last March, and median prices went down by 12 percent.