Charlotte Homes for Sale
Nina Hollander
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Charlotte’s annual sales tax holiday on Energy Star appliances rolls around again this weekend, allowing consumers to save money while reducing their energy use. The North Carolina Legislature defines “Energy Star qualified product” as “a product that meets the energy efficient guidelines set by the United States Environmental Protection Agency and the United States Department of Energy and is authorized to carry the Energy Star label.”

Clothes washers, freezers, refrigerators, central air conditioners, room air conditioners, air-source heat pumps, geothermal heat pumps, ceiling fans, dehumidifiers, and programmable thermostats all qualify for the tax break.

Click here for more information about the Energy Star Program,  including tax credits for energy efficiency.

It appears that the first-time buyer tax credit might be renewed with some significant changes at least until April 2010!  Senate Banking Committee Chairman, Chris Dodd (D-Connecticut) has said that Senate Democrats have agreed to extend the first-time home buyer tax credit. Here are some of the changes being considered in the latest version:

• The program would be extended to home contracts signed, not closed, by April 30th. Home buyers then would have another 60 days to close the sale.
• The credit would be expanded to include “step-up” buyers, who’ve lived in their current home for at least five years.
• The credit amount would be cut to $7,290 from the current $8,000.
• Income limits for first-time buyers would remain the same ($75,000 for individuals; $150, for couples).
• Income limits for step-up buyers would be $125,000 for individuals and $250,000 for couples. 

But keep in mind that this is not yet a final bill and changes to the proposal could occur. The tax credit has had such a major impact on housing sales this year, if you want to see the credit expanded you should contact your Congressional representatives and tell them so! To learn more see this article from Bloomberg News.

Time is running out for first-time buyers to take advantage fo the $8,000 tax credit, which expires on December 1, 2009. Remember, it can take up to 45 days to close on a home in the Charlotte metro area once you have a signed contract.  And to-date, we’ve heard nothing about this credit being extended into 2010. 

As the deadline approaches, you can expect closing attorneys and others involved in the home buying process to be extremely busy. So if you are planning to buy a home or are in the midst of doing so, make sure your plans are well set to ensure you are closed before December 1st.

Anyone who has not owned a home or had an ownership interest in a home in the three years prior to the day of purchase/closing in 2009 is considered a first-time home buyer.

Once the home is purchased, it’s easy to receive the credit. All eligible home buyers can simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected on a new form (5405) that will be attached to the Form 1040. Click here to download Form 5405.  Click here for more information about how to handle the tax credit on your tax return.

Homes purchased for $80,000 or more qualify for the full $8,000 tax credit. Homes purchased at less than $80,000 qualify for 10% of the cost.

Any home that will be used as a principal residence will qualify for the credit, including single family detached homes, townhouses, condominiums, mobile homes, and houseboats. The definition of principal residence is identical to the one used to determine whether you qualify for the $250,000/$500,000 capital gains exclusion for principal residences.

For even more information about the federal housing tax credit click here.

When you’re replacing appliances, making repairs or remodeling, you may be able to recoup part of the cost if your improvements are energy-efficient. A 30% tax credit is available with a limit of $1,500 for all combined credits. From Angie’s List, here are some details about credits:

• The credit applies to material costs for windows, doors, insulation, and roofs. It also applies to material, labor and installation costs for HVAC systems, non-solar water heaters and biomass stoves.
• The improvements must be installed in your primary residence between January 1, 2009 and December 31, 2010. New construction and second homes are not eligible for credits.
• Save your receipts and manufacturer certification statements.
• The credit also applies to materials, installation, and labor for geothermal heat pumps. solar water heaters, solar panels, fuel cells, and small wind energy systems. These credits have different limits. Namely, the tax credit is 30% of the total costs with no upper limit through 2016. And this credit also apples to new construction, second homes, and rental homes.
• Some hybrid vehicles also qualify for a separate credit based on make and model. But keep in mind that this credit is being phased out as sales reach a certain threshold. Visit fueleconomy.gov for more information.
• Products must meet specific standards to qualify for the credit. Energy Star compliance isn’t alway sufficient. For a full list of specifications and qualified products, go to energystar.gov/tax credits.