Realtors say tax credit is working
Several Covington County Realtors said Thursday a tax credit for first-time homebuyers is pushing more prospective buyers to their offices.
The tax credit of up to $8,000, part of the federal “stimulus package,” is available for both first-time homebuyers and homebuyers who have not owned a home in at least three years. The deadline to be eligible for the credit, which is applicable toward a buyer’s 2009 tax return, is Dec. 1.
Tripp Bass, co-owner and agent at Bass Agency/GMAC Real Estate, said the tax credit has been an incentive for first-time homebuyers.
“We’ve had a lot more lookers who are first-time homebuyers coming in lately,” he said. “They almost always say that they’re here looking because they’re aware of the tax credit and its benefits.”
Eligible homebuyers can receive a tax credit of 10 percent the value of their home, with a maximum credit of $8,000. A tax credit reduces a payer’s actual tax, as opposed to a deduction that only reduces taxable income.
Martha Duggan, co-owner and associate broker with Advantage Realty, said the tax credit has proven useful as a marketing tool.
“We’ve been able to use it in our advertising,” she said. “The public has definitely heard about the credit, and it lets them know that we’re aware of the program and we’ll do whatever we can to help them get that credit if they’re eligible.”
Prospective homebuyers must first qualify for a mortgage in order to get the credit, which can be administered in a variety of different ways.
“You can either get it back as just a straight credit, which is basically pure cash,” Bass said. “Or, in some cases, lenders are allowed to lower the balance on the mortgage or help with closing costs, by using the money in that credit.
“Regardless of how the credit is used, there’s no doubt it’s spiked an interest in first-time homebuyers.”
Bass said that according to the National Association of Realtors, traditionally 40 percent of all residential purchasers are first-time homebuyers. In March, that number was up to 53 percent, and Bass expects it to grow even higher as the Dec. 1 deadline approaches.
“People might wait until the very end, and I think you’ll see interest really start to skyrocket as we move toward December,” he said.