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Key Details of the $8,000 Federal Tax Credit for Salt Lake City, Utah Area Homebuyers

Hand full of money Key Details of the $8,000 Federal Tax Credit for Utah Homebuyers

Buy a home between January 1, 2009 and December 1, 2009.
Get $8,000 Federal Tax Credit when you file your 2009 Tax Return (or sooner, see below).
This does not have to be repaid. (UNLESS: You sell the home within 3 years)
If you and your spouse make a combined income of less than $150,000 annually (or if you are single and make less than $75,000 annually), you qualify for the full $8,000 tax credit. If you make more than that, you may qualify for a partial tax credit.
You may not have owned a home during the past 3 years to qualify. (Nor may have your spouse, if you are married.)
The credit is 10% of the purchase price of the home, up to $8,000. In other words, if you buy a home with a purchase price of over $80,000, you should get the full $8,000 credit.
The tax credit is refundable. That means that if you owe no taxes, you can choose to have the government send you the $8,000 as a refund.
You can elect to claim the tax credit on your 2008 return, meaning you can get the credit this year, even though you didn't buy the home until 2009. This may be helpful to those who know that they will make more than $150,000 combined (or $75,000 solo) in 2009. (Assuming they made less in 2008). It also means you can get your $$$ a year earlier.
If you closed on a home early in 2009 and have already filed your 2008 return, you can submit an amended return. (I recommend having a professional accountant help to make sure you do this right.)
If you bought your home between April 9, 2008 and December 31, 2008, you cannot claim the $8,000 tax credit that does not have to be repaid. You can still claim the $7,500 tax credit (read: interest free loan) that does have to be repaid over 15 years. Sorry. Call your congressperson to complain.

The form to use (and where you can get the details on how this credit works) is form 5405 from the IRS website.

I'm happy to answer any questions you might have about anything to do with buying a home in today's economy.

Buying a home in Salt Lake City or the Surrounding Area? Make sure you get an Agent on YOUR side of the transaction!

If you have excellent credit and will be buying a $300,000-$800,000 home in the next 90 days and would like an agent who will work exclusively for you, call us at (801) 969-8989 or contact us via the link on this page.

Exclusive Buyer Brokerages do not list homes and never represent Sellers. Their agents represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

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Posted by Benjamin Clark - Exclusive BUYER'S AGENT - Certified Negotiation Expert - SLC, UT on 02/19/2009 01:18 PM

Comments (9)

$8,000 Federal Tax Credit for Homebuyers in the Home Buying Channel

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Originally posted at: Buying a Home in Salt Lake City, UT: Key Details of the $8,000 Federal Tax Credit for Salt Lake City, Utah Area Homebuyers

This post has been included in Utah Information

9 Comments on Key Details of the $8,000 Federal Tax Credit for Salt Lake City, Utah Area Homebuyers

FEB

Ben

What a great time to buy a home; the rates, the selection, the prices, they all make it a time that everyone that wants to buy a home and can qualify, should be out and achieving what they want to do;buying a home.

Sincerely

Tom Braatz

Benjamin--Nice job on the overview. I have been printing out from the White House website all day, but you summed it up so nicely!

Good summary Benjamin............we've been looking into details all day.

Anna Banana www.annabananarealty.com Phoenix, Arizona

Dear Benjamin,

Thanks for such a great post. This info is unfolding, but some of it is just plain wrong!

Here is the little nugget that no one has been able to open for me. I don't know if I can explain it properly. Let's try this! You have had no taxes withheld. You have no tax liability. Do you still get a check for $8,000? That doesn't sound like a tax credit to me, but a gift!

Thanks,

Barbara

Barbara - This tax credit is refundable. This means that if, after all is said and done, you have no tax liability, the government will send you a refund check for $8,000.

If you would have had a $2,000 refund coming without the credit, you would receive a $10,000 refund check after claiming the $8,000 refundable tax credit.

Likewise, if you have $4,000 in taxes due (real estate agents know what that means), you would receive a refund check for $4,000. ($8,000 credit minus the $4,000 tax due.)

Hope that answers your question.

Also, Barbara, I believe you could apply the credit toward future taxes due, but I think the idea is that the government wants to you spend the money... say on new carpet, new appliances, or finishing a basement or something. They don't only want to get people buying homes, but to move along the industries that are helped when new home owners "outfit" their homes.

With the Down Payment Assistance Programs frozen, and FHA loans now requiring 3.5% down payments instead of 3% (and all of that 3.5% has to be down payment, whereas before some could be closing costs...) some of those who are buying their first homes are spending all their cash reserves on down payment. This puts cash back in their pockets to stimulate the economy.

(I'm not sure it will work as they hope it will, but if you qualify for the program, they are giving you the money, so you might as well take it. If you don't, someone else will.)

In any event, a first time buyer should make sure they hire an agent to represent them on their side of the transaction. It won't matter that they get $8,000 back from the government if they overpay for a home by $15,000 or $20,000.

FEB

Benjamin: This is a great, easy to understand summary for everyone. I also like the graph you have under your picture about Utah homes on the market as I am always looking for good information related to the Utah housing market. Thanks for the post. www.debrasdesigningdetail.com

Benjamin--did you use picnic for your background/header? Nicely done. Conveys a lot of info in a small space!

MAR

The form to use (and where you can get the details on how this credit works) is form 5405 from the IRS website.

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