News

11/22/2008 - Details on the $7500 First Time Homebuyer Credit.  (note - for 2009 a new tax credit has been announced)

Highlights

• First time homebuyers who purchase a principal residence between April 9th, 2008 and December 31, 2008 qualify for the tax credit. (It’s retroactive for buyers who have already closed.)
• The maximum credit is $7500 OR 10% of the purchase price if lower than a $75,000 sales price.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
• If home is purchased in 2009, homebuyer can elect to amend 2008 tax returns and claim a tax credit.
• Tax credit is “Recaptured” by the IRS, and REALLY an interest-free loan and paid back evenly over a 15-year time period. For instance, a $7500 “credit” is paid back at $500 per year. Homebuyers skip a year before payments start.
• Always check with an accountant to make sure this tax incentive truly works in your favor.

The following are not eligible for the tax credit:

• Non-resident aliens
• Buyers who finance home with tax-exempt mortgage bond programs
• If property is disposed of before end of tax year
• If property ceases to be principal residence before end of tax year
• If property is acquired from a person who is related* to the homebuyer
• *If modified Adjusted Gross income exceeds 95,000 (individual) or $170,000 (joint)
• Credit phases out for individual Adjusted Gross Income of $75,000 – $95,000, and between
$150,000 – $170,000 for joint filers (Special rules apply for Washington D.C.)

More details available at http://www.federalhousingtaxcredit.com 

Click here for a flyer you can download and print. First Time Homebuyer Credit Flyer