What is a tax credit?
- Incentive for first time home buyers.
- Applies to home purchases for use as a principle residence of $80,000 and up between now and 12/1/2009 (for homes under $80,000 the credit would be 10% of the purchase price)
Who is eligible?
- 1st time homebuyers (any person who has not owned or purchased a home in the 3 years prior to the day of purchase)
How does it work?
- Every dollar of a tax credit reduces income taxes by $1 In other words the tax is directly applied against the total tax owed.
Is there an income restriction?
- Yes, for those filing form 1040 as single or head of household the income cannot exceed $75,000. Married couples who file jointly may have income of no more than $150,000.
What is a principal residence?
- Generally it is the home wherean individual resides at least 50% of the time.
Are there property location restrictions?
- Yes, the home must be located in the United States.
Do I have to repay the 2009 Tax Credit?
- No. There is no repayment for 2009 tax credits.
Charlie,
ReplyDeleteThat tax credit can also come out as cold hard cash too. We received a first time buyer credit when we already had state & fed rebates. It increased the rebate payement. Also, the credit is reduced for those above the limit. We received only $7,500 instead of the full 8,000. Oh well, and I believe we have to pay ours back.
Just to be clear for the folks, I am not necessarily contradicting Charlie here -- we moved into our construction August of last year and this was our first home purchase. I know they made some changes to the program the most important being the outright grant of the cash rather than the fifteen year 0% loan.
ReplyDeleteYes Marcus there have been changes in the program for 2009. The most significant being that you do NOT have to pay it back. It is a true tax credit! There are restrictions on income to qualify and the maximum credit is $8,000.
ReplyDeleteMost importantly, if you are considering buying your first home you need to move fast! To qualify you must close on your home on or before December 1, 2009. So if you are considering buying your 1st home there is no better time than the present!