In recent years, I have witnessed firsthand the transformational powers of encouraging home ownership. To those who are contemplating their next move or planning for retirement, this is especially important; after all, homeownership has been shown to result in enhanced financial security and even more beneficial health outcomes.
As a real estate agent, it is my duty to advocate for homeownership. With the introduction of the Homebuyer Tax Credit (HBC) – which gives up to $8,000 in tax credits towards home purchases by first-time buyers – it has become easier than ever before! If you’re planning on purchasing a new residence within the next year, then consider taking advantage of these tax incentives; they could save you thousands upon entering your new abode!
The Bottom Line on the New Home Tax Credit:
Indeed, with the New Home Tax Credit, you may be eligible for up to $7,500 USD in tax savings! However, it isn’t an all-inclusive value.
The credit applies only to those who purchase their residence from a qualified property seller within one year of moving into the home. After just 12 months have elapsed since your relocation date, any outstanding gains incurred will be taxed at standard rates.
You also do not have to actually occupy your dwelling upon its acquisition; rather this is merely an opportunity for you to benefit financially – it doesn’t require that you are residing within its walls at present! There is no need for any sort of residency requirement whatsoever – thus providing abundant possibilities for individuals seeking out new outlets and opportunities within their locality.
This is yet another compelling reason why homeownership is such an attractive option – having ample freedom while residing within your abode ensures a sense of comfort that can’t be matched by renting an apartment or staying put at an institution.
What You Need to Know About the New Home Tax Credit
The New Home Tax Credit is an incentive program, which grants tax breaks to individuals and businesses. This new initiative was introduced in 2018 alongside the initial federal tax reform bill – providing a more affordable way for people to own a home while spurring economic growth!
The U.S. tax reform legislation has created a new $10,000 property tax deduction (December 31, 2018) and added a credit against their income taxes of up to $7,500 on primary homes or $10,000 on second homes. This further incentivizes homeownership by offering financial benefits if one chooses to become a homeowner.
The New Home Tax Credit is Not a Tax Break for Homeowners
The New Home Tax Credit is not a tax break for homeowners. Rather, it’s an initiative to incentivize the purchase of new homes by providing sellers with up to $7,500 in cash or tangible items such as furniture and appliances (depending upon their value).
The New Home Tax Credit® is an excellent means of spurring home construction in the US. It provides tax relief for buyers by expediting the process of acquiring their dream abode.
The New Home Tax Credit: How Much Do You Qualify for?
Accomplished purchasers of newly built homes are eligible for a tax credit if their purchase price exceeds the appraised value of the property. This equates to a maximum size of $10,000 per home; however, individual amounts may vary based on a number of factors such as where you reside in the United States and whether or not you yet possess a home that meets certain requirements.
You must be purchasing a new single-family residence within designated duty-free zones to qualify for the New Home Tax Credit. Such areas are limited in nature and offer both practical benefits as well as marketability advantages; however, they can be quite inflexible – leaving no room for interpretation when it comes down to how these limits will be set! As with any other program administered by Uncle Sam, eligibility requirements change periodically.
Can You Claim the New Home Tax Credit if You Bought your Property More than 5 Years Ago?
The new home tax credit may be applicable if you acquired your property between February 14, 2018 and the end of 2019. If this was the case, then you may qualify for up to $7,500 dollars in reductions upon closing on your new dwelling.
If you acquired a residence before February 14, 2018 then the pre-tax purchase price must exceed $375,000 in order for your interest tax liability to be eliminated. And as such it becomes imperative that any sizable purchase must be considered carefully! Make sure to consult an experienced tax advisor before making any decisions regarding whether or how much you owe towards taxes; otherwise there could be potential implications if you fail to respond promptly.
How Much Do Homeowners Save on Their Property Taxes?
You may be eligible for a substantial reduction in your property taxes. The federal government provides tax credits to homeowners as compensation for their contribution to the cost of maintaining public services and infrastructure. This includes such things as local school funding and police protection; thus, saving you money on both ends!
Depending on the county in which your property is situated, you may earn up to $10,000 per year when purchasing a home with no prior residence in it. For those who have resided elsewhere before buying their new abode – this amount jumps up to $20,000-$25,000 potential savings!
Conclusion
The New Home Tax Credit was initially introduced in late 2016 as an incentive to encourage homeownership. It provides $7,500 per eligible home purchase and up to $10,000 per year of 2017 – 2018; with a cap of $1,400 up to $2,000 awarded per year for qualified primary residences.
However, there is more than meets the eye when it comes to this credit! Eligible homeowners can also claim this tax relief by investing in a new dwelling or even purchasing or constructing one. This provides unparalleled opportunities for homeowners all throughout the country!
By taking advantage of this government initiative, you can significantly reduce your tax liability while simultaneously spurring economic growth.
