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New Hampshire Buyers - First Time Home Buyer Tax Credit Deadline is Approaching

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Attention All New Hampshire Buyers -- The First Time Home Buyer Tax Credit Deadline is quickly approaching!

If you want more information, please give me a call and I will be glad to meet with you to discuss the home buying process.

Even though there are efforts in congress to extend the tax credit, many are predicting that an extension of the first time home buyer tax credit will not pass.

The American Recovery and Reinvestment Act of 2009 authorized a tax credit of up to $8,000 for first time home buyers who qualify and purchase a principal residence on or after January 1, 2009 and BEFORE December 1, 2009.

Find out if you qualify for the First Time Home Buyer Tax Credit.

Currently, in Southern New Hampshire, the time frame from the signing a contract to the date of the closing can take several weeks or months. Many simple transactions are taking approximately 6 to 8 weeks to close. Short sales and bank owned properties can take several months.

You may want to begin your search NOW to insure that you don't miss the deadline.

Here are some of the highlights of the first time home buyer tax credit. tax refund

Who is eligible? A First- Time home buyer purchasing either an existing or new home may qualify if all conditions are met. All US citizens who file taxes and meet the other requirements.

Who is a first time home buyer? A first time home buyer is defined as a buyer who has not owned a principal residence during a three (3) year period prior to the purchase. If you are married, the then law requires that both parties meet this test.

If two unmarried buyers want to purchase a home (e.g. parent and child) may allocate the credit to the buyer who qualifies as a first time home buyer. See IRS notice regarding unmarried buyers. Additional scenarios can be found on the IRS site.

What types of property qualify for the credit? Any home that going to be used as your principal residence will qualify. This would include single family, condominiums and town homes, manufactured or mobile homes and house boats.

For a home that you construct, the purchase date is considered to be the first date you occupy the home.

(There are additional restrictions; check with your tax adviser e.g., you cannot purchase a home from your mom, dad, grandparents (ancestors), your lineal descendants (e.g. son, daughter, grandchild) or from your spouse.)

What is the amount of the credit? For home buyers who qualify, the tax credit is equal to ten percent (10%) of the purchase price of the home up to a maximum of $8,000, but only half of the credit amount for married persons filing separately. See IRS instructions for definition of purchase price.

What are the income limits to qualify? The single taxpayer income limit is $75,000. For married taxpayers who file a joint return the income limit is $150,000.

The tax credit amount is reduced for home buyers who have a modified adjusted gross income (MAGI) of over $75,000 for single taxpayers and over $150,000 for married tax payers filing a joint return. The tax credit phases out depending on each taxpayers situation. The phase out range is equal to $20,000.. therefore, if the MAGI for a single person is more than $95,000 or for a married couple filing jointly $170,000, the amount would be "0". To find MAGI, please refer to the IRS website.

How do you claim the tax credit? After you determine that you qualify for the credit and you have closed on the principal residence, complete IRS Form 5405 to determine the tax credit amount.

Do you have to repay the credit? No, so long as the home remains your principal residence. However, the obligation to repay will arise if the home ceases to be your principal residence within 36 months from the date of purchase. In that case, the full amount of the credit received is due on the return for the year the home ceased being your principal residence.

You can find more information on the first time home buyer tax credit on the IRS website.

Give me a call for a free, no obligation consultation on buying a home; or send me an email.

Please remember, this information and the links are intended to provide a general idea of how the tax credit might be applied in different circumstances and to different individuals. Moreover, the rules and regulations are constantly changing. Please consult your tax adviser, accountant and attorney for information on how the first time home buyer tax credit may apply to your individual situation.

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Disclaimer: Information herein may come from various sources, some of which may not be reliable and may change without any notice. Joan Whitebook does not guarantee or is any way responsible for the accuracy of the information in this blog and information provided is without warranties of any kind, either express or implied. Information on this blog represents the opinions and ideas of the author; comments by others may not express the views of the author. Joan Whitebook, Buyer's Option Realty Services - Licensed in NH; Janet White owner/Broker
Copyright © 2009 By Joan Whitebook, all rights reserved.*copyright "New Hampshire Buyers-First Time Home Buyer Tax Credit Deadline is Approaching"

Posted by Joan Whitebook, ABR,e-Pro,CEBA Southern New Hampshire on 07/12/2009 02:33 PM

Comments (18)

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Originally posted at: Real Estate in New Hampshire : New Hampshire Buyers - First Time Home Buyer Tax Credit Deadline is Approaching

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18 Comments on New Hampshire Buyers - First Time Home Buyer Tax Credit Deadline is Approaching

JUL

The deadline is coming up quick! The year is passing by and hopefully many who are in the situation to buy will enjoy their credit!

Joan--I was just thinking about how many people are running out of time as it takes time to get preapproved, find a home and close. Great program but time IS running out!

Sally ~ I know a lot of buyers are unaware of the first time home buyer tax credit. Others, are aware of the credit, but don't know how long it often takes for a transaction to get to closing. I thought this might be helpful for those buyers who may be wanting to take advantage of the credit.

Teri ~ I almost didn't do this post, however, I got a few calls this week and it became apparent that many people still have questions about the tax credit. Since the vast majority of first time homebuyers are "virgin" first time home buyers they probably don't realize how long the process can take. I would hate for someone to miss out on the credit because they weren't aware of the deadline or the amount of time it may take to select and close on a home.

Hi Joan

An outstanding and informative post; as many first time home buyers as possible should take advantage of the tax credit before it's expires.

Good luck and success.

Lou Ludwig

Joan it would be a shame to miss out on the Tax Credit because you did not begin the process soon enough and did not leave yourself enough time to close. This important especially with foreclosures and short sales, where you do not have much control over the time that the process will take. So the best advice is to begin as soon as possible.

Lou - thanks for the good wishes. I am hoping that some first time home buyers see this post. It is not too soon to get started in order to make sure that the buyer can close before the deadline. I am not so sure that congress is in the mood for any extensions.

George ~ You are exactly right about not having much control over the short sales and foreclosures. I think the information on the Internet and TV make things look a lot easier and faster then they are in reality. Even with "traditional" purchases, I think the inspectors, appraisers and loan processors will be on overload as the deadline approaches and they can only get so much done. So, I agree, it is good to get started as soon as possible.

Joan: SUPER post about the tax break for 1st timers... I hope this this features. Better yet, I hope consumers in your area see it and CALL YOU!

Hi Joan, I have seen many posts on this subject here in the Rain. What sets your apart form the other ( some were even featured) is that you have all the details right.

Just between you me and the gatepost I have my ear to the ground and there may be an all encompassing new rule coming out this fall that goes something like this. Every new home buyer for the next year will get a tax credit and the amount being discussed is $11,000. Now please don't quote me, it is all rumor at this point and it may not even come about.But I would guess that it is at least a possibility at this stage of the economy.

JUL

Joan, This is a great post and a timely reminder. Good luck.

The 1st time buyer tax credit has certainly spurred sales in my area. I am sure there will be some scrambling to get in under the wire.

Hi Joan! Excellent reminder for those first time homebuyers and those who have not owned a home in the past three years. The expiration is nearing and hopefully we'll see another surge in the next couple of months for end of November closings!

Kat ~ I hope that first time buyers will see this post and take advantage of the incredible opportunities. The prices are reasonable, reputable lenders have money to loan, interest rates are historiclaly low and there is inventory.

William ~ Thanks for your kind words. You certainly do have good ears. I recently read that Johnny Isakson introduced legislation to extend and increase the tax credit. However, it is not certain and who knows if Congress will be in the mood. Here is a link to one of the sources of this "rumor" http://moneyfeatures.blogs.money.cnn.com/2009/06/16/senator-wants-to-sweeten-home-buyer-tax-credit/

Bill ~ It certainly looks like there are promising signs in the MA and NH markets. There are lots of good reasons to buy.

Debe ~ I think a lot of buyers will want to take advantage of the tax credit. Most buyers don't enjoy getting into multiple offer situations.. so it is a good idea to start the process well in advance of the frist time home buyer tax credit deadline.

You explained that really well Joan in your blog post! I really enjoyed your layout, the clipart you chose and the placement of everything. And, of course, great content!

Joan - I do hope first time buyers make use of this wonderful opportunity.

Nyssa ~ I am glad that you liked the post and the graphics. I know several have authored a post on this subject, but I am reminded that many buyers still are not aware of the credit, or don't understand how they may qualify. I would hate for someone to miss out because they were informed.

Jennifer~ I was just thinking about you and wondering how you seminar went. I am sure you covered this topic in you seminar! Hope all is going well.

AUG

We have a ton of first time buyers freaking out because they have been looking and writing contracts (where they need to) and can't seem to get anything! They want their tax credit! I hope it gets extended but doesn't look probable at this point!

Renee ~ Time is of the essence at this point! I agree with you that it is not a sure deal that the tax credit will be extended. My husband reads the Wall Street Journal from cover to cover and there is no mention of any extension. I think those who snooze will loose out on this benefit. I also am warning buyers to get pre-approved, get focused, and to make reasonable offers appropriate for the market or they will not get their offers accepted.

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