First Time Homebuyer $8,000 Tax Credit. What is it about?
Monday, June 29th, 2009
In 2008 congress enacted a $7,500 tax credit that was designed to help first time home buyers purchase homes. The overall goal of the tax credit was to increase sales and reduce the high inventory of homes. The $7,500 is required to be repaid back over 15 years. This is like an interest free loan.
In 2009 congress increased that amount to $8,000 to first time home buyers who purchase a home on or after January 1, 2009 and before December 1, 2009. This is an improvement over the 2008 tax credit because they raised the amount by $500 and you will not have to repay the credit.
HOW DOES IT WORK? The buyer must purchase a home for $80,000 or more to qualify for the full tax credit. If the home purchase is less than $80,000 then the tax credit is based of 10% of the purchase price. For example, if the home is $70,000, then the tax credit is $7,000.
The tax credit will reduce your income tax liability dollar for dollar on your tax return. If you tax liability is less than $8,000 then you will be given check a from the IRS for the difference. You should consult your tax advisor to make sure you meet all the conditions for the tax credit.
DO YOU QUALIFY? The tax credit is only for first time home buyers. You must not have owned a property in the last 3 years to the day of your purchase.
WHAT IS THE INCOME LIMITATIONS? Buyers that file a joint tax return must have an income no more than $150,000 to qualify for the full credit. If you’re filing your returns individually then your income needs to be less than $75,000 to qualify for the full credit.
DO I NEED TO REPAY THE TAX CREDIT? No! As long as you keep the home for 3 years.
Need more information? Please call us at 480-201-9593 or send us an email at mike@SchudeGroup.com
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