Get $8,000 when you buy a new home
April 14, 2009 – 7:16 amMany of you have asked me about the new credit for first time home buyers. Here’s the gist, brought to you by my mortgage professionals, Leah Odom and Joel Greer. For more info, give me a call.
First Time Homebuyer’s tax credit has increased to $8,000!
First time homebuyers couldn’t ask for more when it comes to the housing market. Mortgage rates remain at historic lows. Prices have dropped dramatically. There are many homes to choose from on the market. And now, the First Time Homebuyer’s tax credit has increased to $8,000.
Back in July, 2008, the tax credit was based on 10% of the home purchase price up to $7,500 and it had to be paid back over time. Today, thanks to the Stimulus legislation, the maximum home buyer tax credit was increased to $8,000 and requires no repayment. The tax credit reduces the amount of taxes owed. A home buyer may go from owing money to Uncle Sam to receiving a substantial refund.
For example, if a homebuyer owes $3,000 in taxes, but qualifies for the full $8,000 tax credit, it would cancel the entire amount owed and $5,000 would be received as a tax refund instead.
The extra cash can be used by home buyers to make improvements to the new home, replenish savings, purchase furniture… it’s up to them.
Who qualifies for the credit?
A first time home buyer is broadly defined as anyone who hasn’t owned a primary residence in the past three years. Single taxpayers with incomes of $75,000 or less and married couples with combined incomes less than $150,000 qualify for the full tax credit, but even those with greater incomes may receive a portion. The 8,000 tax credit is limited to home purchases that close in 2009.
If you know of someone who may benefit from this program, please pass this along. Given all of the other economic junk out there, I would appreciate it if you helped me spread some good news.
