Home Buyer Tax Credit – Who Gets What?

I continue to get questions from my clients regarding the recently extended & expanded homebuyer tax credit, so I thought I would provide readers with a brief overview...

Who qualifies as a First Time Home Buyer?

For the purposes of the tax credit program, a first time homebuyer is anyone who has not owned a primary residence in the previous 36 months. The credit for FTHBs is 10% of the purchase price with a maximum available credit of $8,000. This applies to single taxpayers and married couples.

Who qualifies as a Current Owners?

The tax credit program now gives those who have owned and occupied a primary residence for a period of five consecutive years during the last eight years an incentive in the form of a tax credit of up to $6,500. Single taxpayers and married couples filing a joint return may qualify for the full credit amount.

What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

What are the Income Caps?
The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to $125,000 are eligible for the total amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn more than $245,000 are ineligible.

What is the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

What is a Tax Credit?
A tax credit is a direct reduction in tax liability owed by and individual to the IRS. In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 26 months of ownership is no longer and individual’s primary residence.

Want to learn more?
For more detailed information, please visit the IRS or NAHB websites. I also recommend that you check out this whitepaper, which addresses many of the questions my clients have been asking.

Note: This information is not intended as tax or financial advice. It is strongly recommended that you consult with your tax and financial advisor prior to making any decisions about your tax situation.

Does Your Home Have Leaks?

Is your home able to handle the cold? It would be if you lived in a home that meets or exceeds a Bronze rating in the GHBT Certification Program*.

I regularly help buyers upgrade to high performance homes, such as those found in Briar Chapel. It is the first community in the Triangle to require homebuilders to comply with the rigorous new home construction requirements and third-party testing of the North Carolina Green Build Initiative.

If you're ready to check out green communities, such as Briar Chapel, please contact me. Otherwise, I encourage you to get in touch with your power or gas company and ask about a home energy audit. PSNC Energy, for example, began offering $25 energy audits this fall for houses built before 1993. In addition, Duke Energy now offers free audits for home-owning customers who have electric water heaters or electric heat. As a Certified EcoBroker, I would be happy to recommend additional steps you can take to improve the efficiency of your home, save money and live comfortably.

* Note: The GHBT program is in the process of switching to the National Green Building Standard as the basis for certification.

Hot Water Recirculating Pump Installed

This past weekend, I decided to improve the efficiency of our home even more by installing a whole-house hot water recirculating system. I picked up a unit made by Watts Premier at Costco a few months ago for under $200, and spent another $30 or so for plumbing supplies at the hardware store.

The system includes a pump that you install adjacent to the water heater, and a temperature actuated bypass valve that connects the cold and hot water supply lines at the fixture that is farthest away from the water heater. According to the manufacturer's website, this combination creates a pressure differential that allows the cold and cool water in the hot water supply line to "bypass" (at a low volume) into the cold water supply line through the thermostatically controlled sensor valve, keeping the water in the hot water supply line at a "no-wait" temperature throughout the home. The timer on the pump makes it more efficient during downtime.

It's going to take a few months to determine how much this system will save us each year, but most estimates I have come across are in the neighborhood of 11,000-15,000 gallons of water saved per year. Obviously, this is offset somewhat by the additional expense of running the pump, but this can easily be minimized by setting the timer on the pump for peak use.

There are other ways to accomplish the same results, depending on your needs and budget. If you are interested in installing such a system in your home, be sure to bring this up with your builder early in the process to avoid change fees. Better yet, hire me to represent you throughout the purchasing process, and I'll be happy to inform you of other energy-saving features you can ask for.

Next project... a whole house water filtration system!

Homebuyer Tax Credit Extended & Expanded

With the new Homebuyer Tax Credit legislation passed on November 6th, now is the perfect time to purchase a new or existing home in NC. The new credit extends the deadline to April 30th of next year, raises the qualifying income limitations, and expands the offer to include current homeowners who have lived in their residence for five consecutive years.

The tax credit program now gives those who already own a residence some additional reason to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

For more detailed information, please visit the IRS or NAHB websites. I also recommend that you check out this whitepaper, which addresses many of the questions my clients have been asking.

PSNC Energy Offers Discounted Rate to Customers in ENERGY STAR Homes

PSNC Energy recently started offering a discounted rate for residential customers who qualify for service and whose homes meet the U.S. Department of Energy and U.S. Environmental Protection Agency's ENERGY STAR® for Homes qualification standards, or equivalent.

Homes that meet or exceed the ENERGY STAR rating qualify for Rate 102 (high efficiency residential service). As a result, homeowners pay $.05 per therm less than under otherwise applicable Rate 101.

This discount isn't automatic, however. You must mail, fax or email the ENERGY STAR certificate or equivalent documentation you received from your builder or third-party auditor to PSNC in order to qualify:

Builder/Commercial Group
PSNC Energy
PO Box 1398
Gastonia, NC 28053-1398
Fax: 704-810-3118
E-mail: PSNCBuilderGroup@scana.com

Should you have questions regarding the discounted rate, please contact PSNC directly at 1-877-776-2427. Otherwise, if you're interested in purchasing a highly efficient home in the Triangle and take advantage of this discount, please email or call me at 919-360-1285.

"If you cannot measure it, you cannot improve it." - Lord Kelvin

In my last post, I told you about the PowerCost Monitor by Blue Line Innovations. This week, I'd like to tell you about what Google is doing with regards to energy monitoring.

Google PowerMeter shows consumers their electricity consumption in a secure Google gadget. This is a relatively new product, so Google is still in the process of testing it with a number of utility partners in the US, India, Germany, and Canada.

As I mentioned in my earlier post, studies show that real-time feedback of your household's personal energy information is likely to save you 5–15% on your monthly bill. Even greater savings are possible if you use this information to see the value of retiring your old refrigerator, installing a new air conditioner or insulating your home. The potential impact of large numbers of people achieving similar efficiencies is even more exciting. For every six households that save 10% on electricity, for instance, we reduce carbon emissions as much as taking one conventional car off the road.

Unfortunately, Google's energy monitoring service is not available in NC yet. However, other monitoring services are becoming available, such as the free one launched by Piedmont Electric a few months ago that uses MyUsage.com.

Real-Time Feedback Saves You Money & Reduces Carbon Emissions

Ever wonder how much power you're using? Want to save money on your electric bill? If so, check out the PowerCost Monitor by Blue Line Innovations. This wireless energy monitor tells you how much electricity your home is using from moment-to-moment and in total.

Energy monitors such as this one encourage you to change your lifestyle and reduce your overall carbon footprint, by showing you just how much power your home is using at any given point in time. In fact, it's believed that households that use real-time feedback can reduce electricity use by as much as 6 to 18 percent.

The PowerCost Monitor is a two-part device. A sensor unit attaches to the face of the power utility meter outside your home. Using an infrared eye, it reads the movement of your meter's dial, then transmits information to a receiver/digital display that you keep indoors. It's not compatible with all meters, so be sure to look your's up before placing an order.

Although it will take you a few months to make up for the cost of the unit (~$110), you'll enjoy saving up to 20 percent on your energy bill with the PowerCost Monitor thanks to the sticker shock of watching your energy use in real time.