First Time Home Buyer Tax Credit 2009 Highlights
While the $15,000 credit died in House and Senate negotiations the $800 billion stimulus bill that President Obama signed into law Tuesday includes a smaller attempt to help the real estate market. Here are top things you should know about the $8,000 first-time home buyer tax credit.
- $8,000 for new buyers:This credit offers 10 percent of the purchase price of the home capped at $8,000 for first-time home buyers and principal residences. Does not have to be repaid.
- What's a first time buyer: A "first-time home buyer" is somebody who hasn't owned a principal residence for last three years. That means if you've owned a vacation home but not a principal residence you would still qualify for the credit.
- 2009 only: For purchases on or after January 1 and before December 1, 2009 are eligible for the credit. People that bought a home last year won't be able to take advantage of it.
- Income restrictions: The credit has income limits. Single buyers need a modified adjusted gross income of $75,000 or less and $150,000 for married couples. Higher income earners may be eligible for reduced credits.
- Tax Refund: Because the tax credit is "refundable" - buyers can take advantage of it even if they don't have much tax liability.
- Payback: Buyers have to own the home for at least three years. If they sell the home before then they will have to return the credit to the government- possible exceptions such as death or divorce.
