There seems to be a great deal of confusion over the $8,000 tax credit for home buyers which President Obama plans to sign into law tomorrow. Who qualifies for the tax credit? Is it for anyone or is it limited by income? Will I be required to repay the tax credit? When must I buy to get the tax credit?
Here is a chart to help understand the changes with the bill being signed tomorrow by the President. If you have any questions, call me! 616.648.0800, e-mail me: don@donphelan.com, or sign up for one of my upcoming seminars on HOME BUYING! Just click here!
If you know someone who could benefit from this FIRST-TIME HOMEBUYER TAX CREDIT (have not owned a home in the past 3 years), please FORWARD THIS INFORMATION TO THEM!
FIRST-TIME HOMEBUYER TAX CREDIT
FEATURE CREDIT AS CREATED JULY 2008 APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008 REVISED CREDIT - EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009 Amount of Credit Lesser of 10 percent of cost of home or $7,500 Maximum credit amount increased to $8,000. Eligible Property Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence. No change. All principal residences eligible. Refundable Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser. No change. Purchasers will continue to receive refund for unused amount when tax return is filed. Income Limit Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000). No change. Same income limits continue to apply. First-time Homebuyer Only Yes. Purchaser (and purchaser's spouse) may not have owned a principal residence in 3 years previous to purchase. No change. Still available for first-time purchasers only. Three-year rule continues to apply. Revenue Bond Financing No credit allowed if home financed with state/local bond funding. Purchasers who utilize revenue bond financing can use credit. Repayment Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing. No repayment for purchases on or after January 1, 2009 and before December 1, 2009. Recapture If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale. If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009. Termination July 1, 2009 (But note program changes for 2009) December 1, 2009. Effective Date Purchases on or after April 9, 2008 and before January 1, 2009. Repayment to begin for 2010 tax year. All revisions are effective as of January 1, 2009.
As modified in the American Recovery and Reinvestment Act.
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