Quick facts about $8,000 federal tax credit
IT’S AN UNBELIEVABLE TIME TO BUY A HOUSE!!! Never before in recorded history have interest rates been low at the same time that home prices have been depressed. There is an amazing amount of inventory. There are awesome government incentives for first time buyers (and some for all buyers in the works – stay tuned).
I’ve had a lot of questions about the federal tax credit and have come across several potential first time homebuyers recently that don’t know about this incentive, so here’s a few quick facts:
· The credit is $8,000 (or 10% of the home price if the purchase price is less than $80,000).
· The tax credit does not have to be repaid unless the property is sold within 3 years.
· It is available for purchases between January 1, 2009 and December 1, 2009.
· It is available to purchasers who have not owned a home in the last 3 years (from day of purchase).
· There is an income limit for the full tax credit: $75,000 single, $150,000 married. There is a partial credit available for individuals making $75,000-$95,000 and married couples making $150,000 – $170,000. The more you make, the less credit you would get – it’s phased for these income ranges.
· The purchased property must be a primary residence (the buyer must spend at least 50% of their time in the residence).
· The purchased property can be a single family residence, condo or townhome. Some houseboats and manufactured homes may qualify.
· The property must be in the United States.
· The funds are not available to apply towards closing costs. However, if a buyer plans on using the tax credit, they can modify their income tax withholding through their employer (decrease withholding to increase take-home income and make more cash available for a 2009 closing).
· If a buyer already purchased a home in early 2009 and claimed the $7500 loan provided for in the 2008 stimulus package, they can amend their 2008 returns and claim the full $8,000 credit provided for in the 2009 package.
