First-Time Homebuyer Tax Credit

Friday, February 27, 2009 by Tammy Mitchell Hines

Happy Friday Afternoon To You!

To my local readers....are you getting in the "St. Patty's Spirit" with our window decorations??? And to my out of town readers....how about stopping on over and seeing for yourselves ?? :-)

Now on to the business of Real Estate! I have been flooded with inquiries on how this Tax Credit can benefit my buyers! This is a great question that I am loving helping my buyers get answered! (Remember - 'First Time' is defined under the credit as an individual who has not owned a home in the last three years...) I decided to get this information on my blog for those of you that I haven't been able to talk to yet! I urge you to give me a call when you have a minute, I love to keep in touch with my clients!

Read on...... 

(following excerpt from the Illinois Association Of Realtors)

The American Recovery and Reinvestment Act of 2009 features an $8,000 tax credit for first-time buyers who purchase a home on or after Jan. 1, 2009 and before Dec. 1, 2009.

 Details of the tax credit include:

• The temporary credit is only available for home purchases made from Jan. 1, 2009 to before Dec. 1, 2009 and is equal to 10 percent of the cost of the home, up to a maximum credit of $8,000.

• Buyers claim the credit on their federal tax return to reduce their tax liability. If the credit is more than their total tax liability that year, the buyer will get a refund check for the balance.

• Only first-time homebuyers can take advantage of the tax credit. A first-time buyer is defined under the tax credit as an individual who has not owned a home in the last three years. For married joint filers, both must meet the first-time homebuyer test to take the credit on a joint return.

• Eligible properties include anything that will be used as a principal single-family residence-including condos and townhouses.

• There are income guidelines on the credit. Individuals with an adjusted gross income up to $75,000 (or $150,000 if filing jointly) are eligible for the full tax credit. The credit is phased down for those earning more and is not available for those with an income above $95,000 (or $170,000 if filing jointly).

• The new tax credit does not have to be repaid if the buyer stays in the home at least three years. But if the home is sold before that, the entire amount of the credit is recaptured on the sale.

• People who purchased homes under the 2008 $7,500 tax credit program will still be required to repay that credit to the government over a 15-year period.

 Have a GREAT weekend!