Understanding the $8,000 First-Time Home Buyers Tax Credit

Real Estate Agent with Silver State Realty & Investments

Original content by Jan O'Brien - Real Estate Coach Coach | Teams & Brokers B.0030676 (NV)

Is the newly modified $8,000 First-Time Home Buyer Tax Credit going to encourage more buyers to jump off the fence and purchase a home in 2009?

Last week, Dr. Lawrence Yun, Chief Economist for NAR, spoke at the Rocky Mountain Conference in Las Vegas and predicted that las Vegas would lead the country out of the housing crisis.  He cited two key reasons: 1.  Las Vegas home prices are under market and 2. The Stimulus Plan

Read Kathryn Bovard's full post for more Today Chief Economist Predicts Las Vegas Real Estate Market to Lead the Nation Out of Housing Crisis

The Tax Credit ...In a nutshell:

  • Changes the 2008 $7500, repayable credit to $8000 and no repayment (tax credit - "refundable")
  • Good for purchases of principal residence on or after January 1 to December 1, 2009
  • Only first-time home buyers are eligible (defined as anyone who has not had any home ownership in 3 years prior to day of 2009 purchase)
  • Income restriction - individuals earning up to $75,000 and married couples who file joint return no more than $150,000
  • There is a reduced credit which totally phases out for individuals at $95,000 annual income and $170,000 (joint return)

Here's more on the home buyer tax credit from NAR:

Home Buying Tax Credit. "The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.  The credit does not require repayment.  Most of the mechanics of the credit will be the same as under the 2008 rules:  the credit will be claimed on a tax return to reduce the purchaser's income tax liability.  If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser."

Download HomeBuyers_Tax_Credit - NAR Presentation

Download HomeBuyer_tax_cred_qa - FAQ from NAR

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