Tax Credit for Home Buyers

I came across some information that I wanted to pass on to you. If you or someone you know is in the market to buy a home as a first-time homebuyer, you could get a big boost with a tax credit.

The following is courtesy of Jeff Galligan who is a realtor in the Harvey Park area.

The government stimulus package recently gave real estate a big shot in the arm with the introduction of the tax CREDIT for first-time home buyers.

The plan works like this:

Qualified First-Time Home Buyer Tax Credit

• Must Buy and Close on a New Residence Before 12/1/2009
• Enjoy Up To $8,000 in Federal Income Tax Credits

How to Qualify:

I. If neither you nor your spouse has owned an interest in a principal residence (in the U.S.) during the last 36 months ending on the date of the purchase of your current residence (if you owned one).

a. But you do NOT buy:

i. From a related party (such as a family member)

ii. Property located outside the U.S.

2. You are buying the property to become your primary residence (not an investment property).

3. Property may be a single dwelling, condominium, houseboat, or mobile home.

How Much of a Credit:

1. Up to $8,000 (not to exceed 10% of the home price) and if your 2009 adjusted gross income (AGI) does not exceed $75,000 for single and $150,000 if you are married filing jointly.

2. No credit if your 2009 AGI exceeds $95,000 for single and $170,000 if you are married filing jointly.

3. Partial credit if your AGI is between $75,000 and $95,000 for single and between $150,000 and $170,000 if you are married filing jointly.

4. If you have no tax liability for 2009 and have a credit, the IRS will actually pay you the credit amount when your 2009 tax return is filed.

Important:

You must continue using the property as your primary residence for 3 years. If the property is sold or no longer your primary residence you are liable to compute and payback the portion of the credit that was not earned and report it on your tax return for the year of change.

Philip