Details on the NEW First Time Home Buyers Tax Credit

Details on the NEW First Time Home Buyers Tax Credit

Here is a simple explanation of the First-Time Home Buyer Tax Credit that is part of the Stimulus Package that was just signed by President Obama.

Essentially, first-time home buyers within certain income limits who purchase a home in 2009 before December 1, 2009 will receive a tax credit of up to $8,000.

· To qualify as a first-time home buyer as defined in the programs, the purchaser (and the purchaser’s spouse) may not have owned a home in the three years prior to the purchase date of the home. Single family homes qualify for the program. The home must be the primary residence.

· The tax credit is subject to adjusted gross income limitations as follows: $8,000 tax credit for AGI of less than $75,000 if single or less than $150,000 if married filing jointly; phased out for AGI up to $95,000 single/ $170,000 joint.

· The amount for the credit is the lesser of 10% of the home purchase price or $8,000.

· The $8,000 tax credit will not be repaid unless the home is sold within the first three years. If sold, the full amount of the tax credit must be repaid upon sale.

· The $8,000 tax credit does not restrict a purchaser from utilizing state/local revenue bond money to help finance the home purchase.

The program is similar to the $7,500 tax credit which applied to home purchases made in 2008 after April 9. Some differences are noted below:

· While a purchaser still owns the home, the $7,500 credit must be repaid in equal payments over a period of 15 years, starting with the 2010 tax filing.

· Upon sale of the home, any portion of the $7,500 credit not yet repaid is due in full.

· The $7,500 credit was not available to any purchaser utilizing state/local revenue bond money to help finance the home purchase.

· Under both the $7,500 and the $8,000 programs, the credit may be applied to the purchaser's 2008 income tax return. Any tax refund monies due the purchaser(s) will be sent as an IRS refund.

I hope this information helps. It's time to get the word out to purchasers who qualify for the tax credit that NOW is the time to buy! CALL ME!

Carlos Salinas
Real Estate Magician