Buyers must act soon or waste tax credit

Builders along the Wasatch Front say the tax credit has helped generate interest among buyers -- and helped boost sales. But sales of both new and existing homes remain well below the boom years of the mid-2000s. (Al Hartmann/The Salt Lake Tribune )

Time is running out to take advantage of a historic $8,000 incentive for home buyers that the federal government put in place to help resurrect the nation's ailing real estate sector.

Although it's called the First Time Homebuyer Credit, it's actually available to anyone who has not owned a home in the past three years.

But you have to act fast. Buyers must close on their properties before Dec. 1 to qualify for the money, which is paid by the Internal Revenue Service in the form of a tax credit.

"For people just starting out looking for a home, they are really going to have to hustle," said Chris Sloan, a broker whose office is working with a number of buyers trying to beat the buying deadline. "Realistically, you're going to need to be under contract by at least early to mid-October to make sure you meet the deadline."

Although the purchase of some properties can be completed in as little as 30 days, in an era of tighter lending standards and greater scrutiny of borrowers, there can be delays that extend closing to 45 days or beyond.

That's why Kerianda and Aaron Proctor stepped up their search for a new home early this summer . The couple started house hunting last winter, and though they couldn't find what they wanted, they knew they wanted the $8,000.

"We just didn't want to miss out on this," said Kerianda Proctor. The couple, who had been renting an apartment, closed on their first home, a tri-level in

The couple has amended their 2008 tax return and expect to see their money in weeks. They plan to use it to pay off bills and put money in savings.

Jonathan Swinton and wife Annie are still under pressure to beat the home-buying deadline. The couple, who are building a home in Woods Cross, are anxious for their builder to finish so they can close and be certain they'll get the $8,000.

Completion date is expected the first week in October, and the couple have been in the home builder's office several times to voice their concern about the approaching deadline. "Our builder promises it's going to be done in time," Jonathan Swinton said. "We told them it has to be, or we aren't buying it."

The Swintons plan to pay down student loans or their mortgage with the incentive money.

Builders along the Wasatch Front say the tax credit has helped generate interest among buyers -- and helped boost sales. But sales of both new and existing homes remain well below the boom years of the mid-2000s.

Under the incentive program, the government is allowing buyers to claim 10 percent of the purchase price of their home -- up to $8,000 for single people or married couples filing joint returns.

Last year's home-buying incentive wasn't as generous. It was a $7,500 tax credit that had to be repaid -- without interest -- over 15 years.

This year's incentive does not have to be repaid if the home remains a primary residence for at least 36 months after purchase, the IRS says.

The credit is phased out at higher income levels -- modified adjusted gross incomes of more than $75,000 for individual filers and $150,000 for those filing jointly. But most Utah families have incomes below the threshold and will be able to get the entire amount of the credit.

lesley@sltrib.com