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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