First Time Home Buyer's Tax Credit

What you need to know ~ by Mike McLane

There were a number of changes starting January 1st, 2009 to help stimulate the flattening (in some cases sinking) housing market. One of those chages was the 2009 First Time Home Buyer's Tax Credit of $8000. Here you will have the details broken down simply and factually. Let us know if you have any questions.

How do you qualify?

There are some qualification criteria. If you did not have any "vested interest" or ownership in a home 3 years prior to January 1st, 2009 and have bought a home between January 1st, 2009 and November 30th, 2009 you will qualify to recieve the tax credit.

You would have to occupy the property as your "principle residence" and cannot sell it within 3 years of the purchase, or if you do sell it you would be required to pay back the $8000 credit. There is no re-payment requirement for this credit otherwise.

How much do I get?

Not everyone will recieve the full $8000 credit. The maximum amount of the credit is $8000 but no more that 10% of the purchase price of the home. If you bought your home for $50,000 you would recieve no more than $5000 for your credit.

What are my income restrictions?

There are income restrictions these vary if you are married or single, also the amount of your credit may vary because of your income.

The MOST you could make to recieve the FULL $8000:

Single Buyers Income Restriction: $75,000

Married Buyers Income Restriction: $150,000

If you make more than the above limits you may still qualify for some credit. The MAXIMUM income restrictions are called "Maximum Phase-Out Amounts". If you fall between the qualifying numbers you will recieved a graduated credit amount.

The MAX you could make to recieve partial credit:

Single Buyers Max: $95,000

Married Buyers Max: $170,000

What kind of property can I purchase?

The property has to be located within the United States, as your principle residence, and be a single family home, townhouse, condo, and some houseboats and manufactured homes may qualify.

How do I get the credit?

You may file for your tax credit on your 2009 taxes prior to April 15th, 2010.

If you haven't already filed your tax return for 2008 and have filed for an extension you can file to recieve your tax credit by filing with your 2008 return.

This is my favorite option:

If you have already filed your 2008 taxes you can AMEND your 2008 taxes once your purchase has been recorded and file that amendment to recieve the credit this year.

Will there be a tax credit next year too?
At this time, there is no confirmation that there will be a tax credit next year. There has been some "buzz" that there will be, there should be, etc. Ulitmately, there is not better time than the present to evaluate your current housing situation and figure out if now is the time to buy! You can always contact us for more information at 227-1533 or mpmclane@gmail.com. Also, refer to our Buyer's Package to learn about the steps to buying your first home.

For more infomation, Q&A's are available below:

National Association of Realtor's Tax Credit Overview

First Time Home Buyer Tax Credit Brochure