Thursday, May 7, 2009

The First Time Home Buyer Tax Credit - What You Need to Know!

First-Time Homebuyer Tax Credit Comparison
Here is a quick breakdown between the original tax credit in July 2008 and the new credit that came out in February’s American Recovery and Reinvestment Act. The February 2009 Tax Credit is a much better deal for home buyers - read on!
  • The original credit created by July 2008 and the revised credit was released in Feb. 2009
    Definition of first time home buyer:
    Buyer (and buyer’s spouse) may not have owned a principal residence for 3 years prior to purchase
  • Amount of tax credit:
    The February 2009 credit allows for a maximum credit $8,000
  • True credit or repayment?
    True credit – unless the home is sold within three years, at which point the first-time homebuyer who is now the seller) must repay the entire amount to the IRS at closing
  • Effective dates:
    Applies to homes purchased between January 1, 2009 and November 30, 2009
  • Tax implications:
    Reduces (or can eliminate) income tax liability for the year of purchase; e.g., buyers will pay less tax or receive a bigger refund
  • Eligible properties:
    Any single family residence (including condos, co-ops, townhouses, etc) that will be used as a principal residence
  • Income limits
    Full credit for individuals with a modified adjusted gross income of $75,000 or less ($150,on a joint return); partial credit for income from $75,000 to $95,000 ($150,000 to $170,000 on a joint return)

For all of your real estate needs - contact Chrissy and Lisa, we'll save you $$.

Chrissy and Lisa do not give tax advice. For additional questions regarding tax advice, please consult your tax professional

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