Home Buyer Tax Credit - What Is It?

Home Buyer Tax Credit - What Is It?

We've been hearing about "the home buyer's tax credit" for a while and those of us in the housing industry are pretty familiar with it, however, if you don't deal with it every day, you may not know.  If you're thinking about buying a home you DEFINITELY want to take advantage of this TAX CREDIT.

A tax credit means you take whatever the amount of taxes your owe for the year and you SUBTRACT the amount of the credit from the taxes you owe. So, if you owe $8000 in taxes and you qualify for the $8000 tax credit, you will owe NO tax for the year.  If taxes have been taken out of your paycheck, then you get it all back - a big fat check from Uncle Sam.  If you only owe $5000, you would get an extra $3000 back.

There are 2 different credits: the 1^st Time Home Buyer and the Repeat Homeowner.

A tax credit of up to $8000 is available for 1^st time home buyers who buy a home between 1/1/2009 and 4/30/2010 (if a home purchase is under contract by 4/30/2010 the buyer has until 6/30/2010 to close).  A 1^st Time Home Buyer is defined as someone who hasn't owned a home in the last 3 years. 

A Tax Credit of up to $6500 is available for repeat homeowners who have owned and resided in a home for 5 consecutive years out of the last eight.  This repeat Tax Credit applies to home sales between 11/6/2009 to 4/30/2010 (if a purchase is under contract by 4/30/2010 they have until 6/30/2010 to close). If you own more than one house when you buy the new house you don't qualify.

If you'd like to know more about the Home Buyer Tax Credits, there is good information on the National Homebuilder's website. 

 If you think you're ready to Buy A Home, you can begin your home search on my website.  You can find all the houses for sale in the greater Birmingham area.  If you see something you like, let me help you buy the home of your dreams.