Quick Review of Home Buyer Tax Credit

The American Recovery and Reinvestment Act of 2009 is passed and signed into law, so what does it mean to you as a homebuyer? I am getting a lot of questions about the first time homebuyer tax credit of $8000, the main two being “Who qualifies? And “How does this credit work?” The first time homebuyer tax credit is available to everyone who has not had ownership of a home in the last 3 years. If you’re married that goes for your spouse as well. Even if you had owned a home years ago you still qualify. The income limits are $75,000 for a single person and $150,000 for a married couple. Unlike the $7,500 interest free loan last year, this is a straightforward credit. It works like this.
For every $10,000 of purchase price, you receive a $1,000 credit against your income tax. This is capped at $8,000. One you go above $80,000 for a purchase price the full credit is available. Since this is a credit it means you get the full amount of money you qualify for. You can receive the money in two ways, one change the withholdings on your taxes and get more money in your paycheck, or get a check back with your tax refund if you there is any money left after paying your taxes.
This is a great opportunity for those of you who are thinking of buying a house in the next year. I am putting the links to great sites that explain more about this program. I am also putting the application here for you to download. Before you purchase a home and go after the credit, talk with your tax advisor, real estate professional, and lender to make sure you get full advantage of this great program. If you have any questions please feel free to email or call me.