The First-Time Home Buyer Tax Credit was created to stimulate the housing sector of our economy as well as to put home ownership within reach of many people who may have thought that home ownership was beyond them. The tax credit, which was passed by Congress, grants a tax credit of up to $8,000.00 for first time home buyers. The details of the tax credit are as follows:
- The tax credit is available to first-time home buyers who purchase a home between January 1, 2009 and December 1, 2009. A "first-time home buyer" is a home buyer (or his/her spouse) who has not owned a home for three years prior to the purchase of the new home.
- The tax credit is available for primary residences only. The home may be a single family home, duplex, condo, townhouse or co-op, and it must be lived in by the home buyer.
- $8,000 is the maximum allowable credit for the First-Time Home Buyer Tax Credit. Two factors come into play to determine the amount of the tax credit that will be received by the homebuyer, the cost of the home and the income of the purchaser. Firstly the tax credit is 10% of the purchase price of the home, up to $8,000; and Secondly, the buyer's income: a single buyer with and income of up to $75,000 and a married couple with and income of up to $150,000 may receive the maximum tax credit.
- If a buyer earns more than the allotted income levels they still may be eligible for the credit. The maximum income levels for home buyers to receive the tax credit are over $95,000 for single buyers and over $170,000 for married couples who file jointly.
- The tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income are not eligible for the credit.
- Lastly, the tax credit does not need to be repaid if he/she occupies the home for three years or more. On the flip side, if the home is sold within a three-year period, the credit will be taken back upon the sale of the home.
Take advantage of the First-Time Home Buyer Tax Credit and consider purchasing your first home in Baton Rouge Louisiana. Baton Rouge is weathering the economic storm quite well and offers its residents a wealth of culture and southern charm.
Source: Realtor.org
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