American Recovery and Reinvestment Act-Chart

By
Real Estate Agent with North Texas Home Finders 0462649

FIRST-TIME HOMEBUYER TAX CREDIT

As Modified in the American Recovery and Reinvestment Act

Major Modifications Italicized

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

 

lmo

For more information please contact Lara O'Keefe at 972.838.9156 or visit Hunter's Creek.

Comments (4)

Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Lara, thank you for this well built chart. It brings everything so much more clearly in focus.

Feb 17, 2009 05:16 AM
Lara O'Keefe
North Texas Home Finders - McKinney, TX

Thank you Gary. I'm hoping it will help the buyers understand it better :-)

Feb 17, 2009 06:46 AM
Barbara Delaney
Park Place REALTORS, Inc. - Roanoke, VA

Dear Lara,

Thanks for posting the chart. It will really help!

I have been receiving some conflicting information! What is new?Is the definition of a first time buyer someone who has not owned a home in the past 3 years?

My understanding is that this would apply to couples, too. If one had owned a home, the other would be ineligible. Any clarification?

Thanks,

Barbara

Feb 17, 2009 10:36 AM
Lara O'Keefe
North Texas Home Finders - McKinney, TX

Barbara, I believe that is correct. If one member of the couple has owned before, then they do not qualify.

Feb 18, 2009 04:20 AM