2009 Economic Recovery Act - First Time Homebuyers Fast Facts

By Jeff Geoghan for Coldwell Banker

The 2009 Recovery and Reinvestment act modifies the 2008 first-time homebuyers tax incentives in important ways.  If you’re looking to buy your first home this year, you need to be in the know of how this legislation will affect your tax benefits!  Here’s a snapshot of the current program for purchases made between 1/1/09 and 12/31/09:

• Tax Credit Amount - $8,000

• Eligible Properties – All homes eligible as long as used for primary residence.

• Refunds Applicable? – YES.  If credit exceeds your net tax liability for 2008 or 2009 (you choose which), then you will get the difference as a tax refund in addition to your normal refund.

• Income Limits – Full amount of credit for individuals up to $75,000 ($150,000 for joint filers).  You would still receive a proportional tax credit if income is up to $95,000 for an individual ($170,000 for joint filers).

• Time Limits – Buyers may not have owned a primary residence for at least 3 years prior.

• Repayment? – NO.  This is a major change from the 2008 tax incentive program.

• What If I sell? – No penalty if beyond 3 years.  If sold within 3 years, ENTIRE credit will be owed back to the IRS for the tax year the home was sold.

• What’s My Deadline To Buy? – You must close by December 31^st, 2009

I’ll be posting another article dealing with the 2008 program and what you should know if you bought your first home then.  Either way, it’s pretty critical that you get tax help for your 2008 return if you think you can take advantage of this incentive.  For those “turbotaxers” out there who buy a first home between Jan-April, this means you!

Despite all the controversy over the other 90% of the nearly-$800 billion law, the first-time homebuyer tax incentive has undergone some positive changes and should be considered a serious opportunity for renters and those looking to own in 2009 for the first time.  The current low mortgage rates and burgeoning home inventories further enhance the 2009 outlook.  Even if you don’t buy, make sure you know all the benefits of buying a home this year so that you are making the most informed and best decisions for you and your family.

Contact Ron Felpel, President of Home National Mortgage (717-735-8234), for more specific loan qualification info and the latest Lancaster PA mortgage rates.  

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Coldwell Banker Select Professionals, based at 1000 North Prince Street in Lancaster and with additional offices in Lebanon, Hershey & York can be reached at 717-735-8400 or at www.cbselectpros.com. Coldwell Banker Select Professionals serves the Lancaster PA real estate, York PA real estate, Hershey PA real estate, Harrisburg PA Real Estate, Lebanon PA real estate markets with local offices and agents.

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