FIRST TIME HOMEBUYER TAX CREDIT DEFINED
The tax credit is equivalent to 10 percent of the purchase price of the home–although it’s capped at $8,000–and applies only to first-time home buyers and principal residences. The credit is claimed on the homebuyer’s federal tax return. The credit is refundable, which means that the homebuyer receives a refund for the amount of the credit minus any federal tax liability.
For the purposes of this tax credit, a “first-time home buyer” is defined as someone who hasn’t owned a principal residence for three years before buying a home. The date of purchase is determined as the day that the title is transferred. Simply speaking…. if you’ve owned a vacation home–but not a principal residence–within the past three years, you would still qualify for the credit.
Only buyers who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit.
Income limitations: $75,000 for single earner, $150,000 for two-income families. Buyers earning more than these limitations may be eligible for a reduced credit.
Here are some examples;
Home purchase price of $60,000 – $6,000 tax refund
Home purchase price of $80,000 – $8,000 tax refund
Home purchase price of $100,000 -$8,000 tax refund
A home buyer can file in 2009 for refund OR they can amend their 2008 returns and get the money now! The money can be used for whatever the home buyer chooses and doesn’t have to be paid back! The refund is in addition to whatever refunds already expected.
The other stipulation for this tax credit is that buyers have to own the home for at least three years in order to capitalize on the credit. If the home is sold before then, the buyer would have to return the credit to the government. Some exceptions would be made in certain instances… such as death or divorce.
Lenders in some states have successfully petitioned state government to create legislation allowing them to create loan programs where the tax credit could be used for the down payment for the buyer’s mortgage. So far, Florida is not one of the states offering this type of loan program, but lenders in Florida are trying to change that…. more updates on that in future postings!
DON’T LET THIS OPPORTUNITY TO TAKE ADVANTAGE OF THE TAX CREDIT & HISTORICALLY LOW INTEREST RATES, & HOME PRICING PASS YOU BY… TAX CREDIT WILL EXPIRE ON DECEMBER 1, 2009!
CALL OR EMAIL THE SERENA GROUP FOR MORE INFORMATION OR TO BEGIN YOUR HOME SEARCH!
For more information: http://www.federalhousingtaxcredit.com/2009/faq.php