This is true for both the first time buyer credit, and the existing buyer credit... the amounts bantered about are MAX amounts, and not every purchase will get these amounts. Thought I would reblog this...
Via
Kris Wales - Macomb County MI real estate blog & homes for sale search site (Keller Williams Realty - Lakeside Market Center):
One of the common misconceptions for home buyers (and some real estate professionals) is that the first time home buyers tax credit is $8000 for all buyers.
When reading the fine print of the IRS form 5405 there is an entry line to fill out asking for the smaller of 2 items: $8000 or 10% of the purchase price.
An example: Mr. Smith purchases a home for $65,000. If he meets the criteria to receive
the 1st time home buyers tax credit he would enter $6500 on line #1 of form 5405. If Mr.
Smith purchased a home for $90,000 then he would enter $8000 on that line.
Reiterating: The tax credit is for 10% of the purchase price of the home up to $8000. It is not a full $8000 for every home buyer.
Let's all help to stop the confusion to home buyers by using the words "Up to" in our articles.
Edit: The chart that NAR put out for their members to use states "$8000" but it doesn't say "Up to $8000". You may want to add the language to your own charts for accuracy.
Paul Silver, Owner
Focus Professionals, Inc.
Rhode Island Real Estate Services
;)
;)
