Tax Credit for 1^st Time Buyers

$8000 is Yours and FREE for the taking!

If you’re a first time home buyer you’ll want to grab the $8000 home buyer tax credit while you can. Uncle Sam has passed this FREE gift on to first time home buyers across America as part of the American Recovery & Reinvestment Act 2009. Here are some of the key points you need to know to take advantage of this program:

Who is a First Time Home Buyer?

• You must be a 1 st time home buyer which means that you can not have owned a home within the last 3 years. If you owned a home between 3 and 4 years ago, then the date the Feds look at is the date that was on your settlement statement.
• If you’re a married couple and one person owned a home within the last 3 years and the other did not, then they don’t qualify for the tax credit.
• If you’re an unmarried couple who jointly buys a home, and one person owned a home (within 3 years) and the other did not, they can “designate” the tax credit to that person who will be able to claim it on their individual tax return. This rule also applies for parents to co-sign on a mortgage for their son or daughter. So if the parents own a home and they are willing to co-sign on the mortgage, then the son or daughter who is the 1 st time home buyer can claim the tax credit.
• A non-US citizen, who meets resident-alien status as defined by the IRS is also eligible as long as they meet the requirements above and income limits.

Types of Homes

• Pretty much any type of home qualifies as long as it serves as the principal residence for the home buyer. This includes single family homes, townhomes, condominiums, lofts, patio homes, and more.
• As for new home construction, you must occupy the residence by December 1, 2009 in order for the tax credit to apply.

Tax Credit of Loan

• Unlike the tax credit of 2008, this tax credit is NOT a loan. You really do get the money back after your 2009 tax returns have been files and reviewed.
• You must owner occupy your home for 3 years from the purchase date, otherwise the entire tax credit has to be paid back.
• You must purchase a home between January 1, 2009 and December 1, 2009 in order to qualify for the tax credit. That means that you must “close” on a home by December 1, 2009.
• The full amount of the eligible tax credit is refunded to the buyer, regardless of whether the buyer has paid an equivalent amount in taxes. The maximum credit is $8,000 or 10% of the home purchase, whichever is less.

Note: These are some answers to frequently asked questions. You should consult your tax accountant for specific details.