$8000 First Time Home Buyer’s Tax Credit - 5 Important Questions!
There are SO MANY Homes in Nashville TN that qualify for this credit. Please read on to see if this will be helpful for you too!
1. What Exactly is the $8000 Federal Tax Incentive?
This is a tax credit given to first time Home Buyers of 10% of the purchase price of the home up to $8000. That means if you purchase the home for $80,000 or more the credit is $8000. If the sales price is less than that, the credit is 10% of the sales price.
2. Who Can use the Tax Credit?
Any first time Home Buyer, or anyone who has not owned a home in the past 3 years. The exact time would be 3 years prior to closing in 2009.
3. ANY first time Home Buyer - or are there Restrictions on income?
Good question! It applies to single people whose Adjusted Gross Income (AGI ) is than $75000 or married couples, filing jointly, with and AGI of less than $150,000. Those who exceed the income cap are not totally eliminated, but receive a reduced credit. This is where you need to talk to your accountant or at least a knowledgeable lender.
4. Is this the same as the 2008 Tax Credit and do I have to repay it?
No. The 2008 Tax Credit was designed to help lower home inventory and had to be repaid over 15 years. It was basically an interest free loan. For homes purchased between January 1, 2009 and December 1, 2009 there is no repayment requirement. The money’s yours as long as you do not sell the property within 3 years of purchase.
5. How do I get the Credit?
You simply claim it on your 2009 tax return. The new IRS form 5405 that will be attached to the 1040 form will have a place to put the credit. You can get the form at www.irs.gov.
If you're purchasing in Tennessee, the Tennessee Housing Development Agency, THDA, has a special program to use this stimulus. It comes in the form of a Second Mortgage for downpayment and closing cost assistance. It allows Buyers to get into the home with very little money out of pocket.
The Second Mortgage is at 0% interest until June of 2010, at which point the buyer's tax refund should have arrive and they can then pay off the second. For more details on this program visit the THDA website.
You can also get more information about this type of loan and others from Donna Mitchell at Bank of America.
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Connie Harvey is a full time Realtor with Prudential Woodmont Realty Group in Brentwood TN. She serves Buyers and Sellers in all of Nashville, Franklin and Brentwood TN. Contact her at 615-661-7800 x 1300 or HarveyC@Realtracs.com.