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First Time Home Buyer Tax Credit Fact Sheet

By
Mortgage and Lending with Gibraltar Private Bank & Trust

Miami MortgageAs most of you know my work is focused almost exclusively on providing financing for luxury homes and therefore first time home buyers are not my area of expertise but I am aware that many will have questions regarding the new Tax Credit that is being signed into effect today by President Obama.  Below is a chart that describes the 2008 Tax Credit as compared to the revised 2009 Tax Credit. 

FIRST-TIME HOMEBUYER TAX CREDIT 

As Modified in the American Recovery and Reinvestment Act

Major Modifications Shaded

February 2009

 

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

Amount of Credit

Lesser of 10 percent of cost of home or $7500

Maximum credit amount increased to $8000

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.

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 for unused amount when tax return is filed.

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.

 

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.

Revenue Bond Financing

No credit allowed if home financed with state/local bond funding.

Purchasers who utilize revenue bond financing can use credit.

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

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.

Termination

July 1, 2009 

(But note program changes for 2009)

December 1, 2009

 

 

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

 

I would like to thank the good people at the HomeServices Lending marketing department for preparing this very informative chart. 

Jon Wnoroski
America's 1st Choice RH Realty Co., Inc. - Green, OH
Summit County Realtor

Hi James - Thank you for the break-down on the "First-Time Home Buyer Credit."  This will be useful information to share with buyers.

Feb 17, 2009 02:41 AM
Janie Coffey
First Coast Sotheby’s International Realty - Ponte Vedra, FL
Uniting Extraordinary Homes w/ Extraordinary Lives

thanks for sharing with us!  if you make it a public blog, I'd love to reblog!  thx  Janie

Feb 23, 2009 09:05 PM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

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Dec 08, 2016 07:41 PM