First-Time Homebuyer Tax Credit…….
As a home buyer in O’Fallon MO I am sure that you have heard a lot about the first time homebuyer tax credit and may have questions about what may be available to you.
This tax credit for first-time home buyers was modified in the American Recovery and Reinvestment Act that was signed into law by President Obama on February 17, 2009. The table below shows the modifications/changes* that were made to the original act of April 9, 2008.
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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 |
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Amount of Credit |
Lesser of 10 percent of cost of home or $7,500 |
Maximum credit amount increased to $8,000 |
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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. |
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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 fro unused amount when tax return is filed. |
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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. |
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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 |
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Revenue Bond Financing |
No credit allowed if home financed with state/local bond funding. |
Purchasers who utilize revenue bond financing can use credit. |
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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 |
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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. |
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Termination |
July 1, 2009 (But note program changes for 2009) |
December 1, 2009 |
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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 |
- Major modifications are Shaded
In addition to the above tax credit the state of Missouri is working on an additional $1,000 credit but it has not yet been passed or signed into law. As soon as this happens I will let everyone know.
I would also suggest that those who are looking to use this tax credit first seek the advice of a tax advisor to see how it would affect you. Once you have checked with your tax advisor then I would suggest that you contact a lender and get pre-approved of a home mortgage to see just how much home you are able to purchase.
If you are looking for a new home and a REALTOR® that knows the St. Charles County MO marketplace and one that has called O Fallon MO home for over 15 years give me a call. Call Don Rogers at 314-954-6775 or email me at Don@DRogersHomes.com and we can start you home buying experience today. By the way I am never too busy for your referral, so if you know of someone that is looking to buy or sell have them give me a call, too.
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