There are up to 8,000 reasons to buy a home – now or at least by Devember 1, 2009. The reason is the first time home buyers tax credit of up to $8,000. To quality for this credit, you must not have owned a home within the past 3 years and your income must not exceed $75,000 for single tax payers or $150,000 for married taxpayers. If you are married, both you and your spouse must pass the 3 year test. The credit is reduced for higher incomes maxing out at $95,000 for single taxpayers and $170,00 for married taxpayers.
For a home to qualify, it must be in the US and used as your primary residence. This means vacation and rental properties do not qualify. The home also cannot be bought from a close relative (e.g. spouse, parent, child). The credit is for homes that closed between 1/1/09- 12/1/09. For new construction, the purchase date is considered the date you occupy the home.
If you sell the home within 3 years of the purchase, you will be required to repay the credit. The American Recovery & Reinvestment Act of 2009 was signed into law 2/17/2009. This refundable credit is equal to the lesser of 10% of the purchase price or $8,000 ($4,000 if married filing separately). Refundable, means the tax credit can offset your federal tax liability with any leftover being refunded to you.
Please contact your tax professional for additional guidance on qualifications for the credit and how it may affect you.
The information provided in these articles is for informational purposes only. Consult an attorney, banker, mortgage broker , accountant or other professional for specific advice.
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Great info! I’ve been seriously thinking of buying for about a year now. My partner and I are ready for the step. Problem is, we don’t have enough money for a down payment! Any advice?