Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.
Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Why is “Time Running Out”?
The First-Time Home Buyer Tax Credit Program only applies to homes purchased between January 1, 2009 and December 1, 2009. It is true that December 1st is several months away; however, you should not wait to get started. Let us show you why…
Your Closing Date: Mid to Late November – The home must be closed by December 1st, so your closing date will be the end of November. The target closing date should be set for the middle of November at the latest to allow for any mishaps that may come along as you do not want to become disqualified for the $8,000 based on a postponed closing date. Also, the earlier you close, the sooner the $8,000 tax credit can be issued (if applying to the 2008 tax year).
Offer Accepted: Early to Mid October – After an offer is accepted, there are many items that must happen before you arrive at the closing table. This process takes a different amount of time depending on your unique circumstances; however, typically the ‘pending’ period is between 3 and 6 weeks after an accepted offer. During this time, home inspections are conducted, repairs may be made, loan financing is processed, legal title searches are conducted, etc.
Offer Negotiations: Late September to Early October – Negotiating the offer is sometimes very simple while in other cases, it can take many offers on many houses before a deal comes together. How long you need to allow in your personal home buying timeline depends on the offer you intend to write, the sellers reaction to the offer (which you won’t be able to know in advance) and the amount of ‘give’ between the two of you. Some deals come together immediately and some never do.
Finding the Perfect Home: You don’t want to be rushed during this step! – You are already down to only 8 weeks! Don’t wait another day, call your Realtor today!
Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:
–The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.
–The buyer’s income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
How to Get the First-time Homebuyer Tax Credit?
You’ve decided to purchase a home and take advantage of the 2009 First-Time Home Buyer Tax Credit. Here’s what you have to do to get your benefit:
- Close on your home purchase by November 30, 2009,
- Ensure that you are a qualified first-time buyer under IRS guidelines,
- Decide which year to file under, 2008 or 2009,
- File an amended 2008 return or choose to apply the credit to your 2009 tax return.
Source: Realtor.org Articles:
2009 First-Time Homebuyer Tax Credit
How to Get the First-time Homebuyer Tax Credit?