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First Time Home Buyer Tax Credit - Lets Review

Posted by Benjamin Dona on Sunday, July 19th, 2009 at 10:58pm.

We often get asked a lot of questions about the First Time Home Buyer Tax Credit Program. Obviously, it is a little confusing to many folks. Upon reviewing our email and phone logs regarding the questions we have received, here are some explanations about the program requirements we hope you may find useful.

  • For married couples, both have to qualify as first-time buyers to get the tax credit.
  • For non-married couples, only one buyer has to qualify. So, in some cases it may be beneficial to buy a home before you get married.
  • If both buyers qualify for the tax credit, only one of them can actually get it. There is one credit per household.
  • To qualify for the full $8,000 tax credit, a single buyer can't make more than $75,000 and a couple can't earn more than $150,000. You can qualify for a partial credit as a single buyer if you earn between $75,000 and $95,000. Couples can make between $150,000 to $170,000.
  • The home must be purchased and closed prior to November 30, 2009.
  • The amount of the tax credit is 10% of the purchase price. So, to qualify for the full $8,000 tax credit, the home must cost $80,000.
  • You cannot acquire the home from a related person.
  • You can't acquire the home by gift or inheritance.
  • You cannot be a nonresident alien.
  • You are not allowed to use the $8,000 credit as a down payment.
  • The credit reduces the buyers' tax liability. If the credit is more than the taxes owed, the buyer will get a refund check.
  • The buyer must keep the home for at least three years in order not to have to repay credit they receive.
  • Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats.

In addition, it looks like our illustrious lawmakers in DC may extend or expand this program by the time it expires. If so, we'll update the blog post with the new information.

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8 Responses to "First Time Home Buyer Tax Credit - Lets Review"

Jeff Ellis wrote:
Thank you for all the clarification. It seems that so many people are aware of this program, but not in its entirety. Thanks for the great post!

Posted on Tuesday, July 21st, 2009 at 4:45pm.

Benjamin wrote:
Glad to be of service, Jeff.

Posted on Tuesday, July 21st, 2009 at 4:57pm.

Rachelle Anselmi wrote:
Simple and yet very informative - to the point but easy to understand. I appreciate the breakdown of the whole program.

Posted on Thursday, July 23rd, 2009 at 1:28am.

Cary NC wrote:
Thanks for taking the time to create an easy-to-use-reference list. I agree that there still seems to be quite a bit of confusion regarding the tax credit.

Posted on Thursday, July 23rd, 2009 at 2:25am.

Benjamin wrote:
Your welcome! Be sure to pass it around to your peers.

Posted on Thursday, July 23rd, 2009 at 9:38am.

Jason wrote:
For example, when I file my taxes for 2009, if I owe $500.00, I'll receive a refund check in the amount of $7,500.00?

Posted on Friday, July 31st, 2009 at 11:48am.

Benjamin wrote:
Hey Jason.

Wish I could give you an answer, but I'm not a accountant. Anything I would say would just be a guess.

Better to deal with an expert!

Posted on Friday, July 31st, 2009 at 5:51pm.

Bill Bartmann wrote:
Excellent blog site. Keep up the good work!

Posted on Thursday, September 3rd, 2009 at 2:01pm.

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