Latest First Time Homebuyer Tax Credit- A Unique Buying Opportunity
With the passage of the latest stimulus package, I was disappointed with the final home buyers tax credit that was eventually passed. The original proposal in the Senate was a $15,000 tax credit for any owner occupied home with no income limits. What ended up passing was an $8,000 tax credit for anyone who has not owned a home in three years, which is essentially a first time home buyer. However, something is better than nothing and we’ll take what we can get. This presents a unique buying opportunity while home prices are VERY attractive.
So here is what you need to know about the credit:
• This credit is $8,000 or 10 percent of the purchase price of the home and applies only to first-time home buyers and principal residences (i.e. owner occupied home). The earlier $7,500 home buyer tax credit had to be repaid…this one does not!
• A "first-time home buyer" is defined as someone who hasn't owned a principal residence for three years before buying a house.
• This is only for 2009 buyers only. The only persons eligible for this tax credit are those who purchase a principal residence on/after January 1 and before December 1, 2009.
• There are income limits to this tax credit. The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit with a modified adjusted gross income of $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.
• If you file your 2009 taxes and owe $0, you will get $8,000 back. Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't owe any taxes.
• Lastly, you have to own the home for at least three years in order to capitalize on the credit. Selling before then will cause you to return the credit to the government.
• All material above is deemed to be true and accurate based on my reading and research. Please consult your tax advisor or financial advisor regarding eligibility for the tax credit.
So here is what you need to know about the credit:
• This credit is $8,000 or 10 percent of the purchase price of the home and applies only to first-time home buyers and principal residences (i.e. owner occupied home). The earlier $7,500 home buyer tax credit had to be repaid…this one does not!
• A "first-time home buyer" is defined as someone who hasn't owned a principal residence for three years before buying a house.
• This is only for 2009 buyers only. The only persons eligible for this tax credit are those who purchase a principal residence on/after January 1 and before December 1, 2009.
• There are income limits to this tax credit. The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit with a modified adjusted gross income of $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.
• If you file your 2009 taxes and owe $0, you will get $8,000 back. Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't owe any taxes.
• Lastly, you have to own the home for at least three years in order to capitalize on the credit. Selling before then will cause you to return the credit to the government.
• All material above is deemed to be true and accurate based on my reading and research. Please consult your tax advisor or financial advisor regarding eligibility for the tax credit.
posted by kristinburns at 6:46 AM
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