First time home buyer tax credit: changes that may benefit you

By
Real Estate Agent with Buyer's Choice Realty

The stimulus package recently signed into law by President Obama, known as the American Recovery and Reinvestment Act, contains some modifications to the tax credit for first-time home buyers that was created last July.

Here are the new details that will help folks that buy in 2009:

* The credit will be the lesser of 10% of the cost of the home or $8000.

* Any single-family, primary, owner-occupied residence is eligible.

* The credit reduces income tax liability by up to $8000. Any portion of the credit that is unused will be refunded to the purchaser.

* 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).

* Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase. * Credit applies to homes purchased on or after January 1, 2009 and before December 1, 2009.

* If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.

* The biggest change: this credit will actually be a credit, not an interest-free loan. The credit does not have to be repaid, subject to sale restrictions as listed above.

If you are a first-time buyer thinking about purchasing real estate in Massachusetts, this year is the time to do so. To learn more about the housing market in any town in MA or to set up a time to sit down together to discuss your particular situation, please do not hesitate to call or email. All details discussed will be kept confidential. Since I work only on behalf of buyers and never take listings, you can rest assured I will represent your interests only.

1.800.252.8937 (ask for John) or reach me via email

Comments (1)

Stephen Graham
Inactive - Atlanta, GA

This is certainly a great savings for home buyers in 2009; it's kind of like not paying any federal taxes for one year; it could actually work out like that for some.

 

* This is not legal or tax advice.

Feb 18, 2009 08:22 AM