In an attempt to jump start the economy, the Unitd States Congress passed a bill that was signed into law on February 17, 2009. The bill grants up to $8000 to qualifying first time home buyers. The bill does not supercede the $7,500 tax credit that was available in 2008. Anyone who bought a home in 2008 is eligible for the $7500 tax credit, which still has to be repaid in small increments.
The provision, which was intially introduced by Senator Johnny Isakson, a Republican from Georgia, started at a whopping $15,000. Woah, right? However, the initial provision was modified and that's what became the $8000 tax credit. I've gotten calls from people who bought a house last year asking if they would qualify for this new tax credit. The answer is no, the tax credit was effective the day it was enacted. According to Dietz, "...effective date of the... amendment is the date of enactment.... so if you've already completed a purchase, you would not be qualified for the new program."
Quick Facts:
1. Who is eligible for the tax credit? Anyone who has not owned a home in the last three years and is purchasing a home as their primary residence. Home purchase must take place after January 1, 2009 and before December 1, 2009.
2. How is the total amount of the tax credit determined? The tax credit is a percentage of the price of your home. It's 10% of the purchase price, up to $8000.
3. Are there income limits? Yes, as there are in most cases. For single taxpayers, the limit is $75,000. For married taxpayers filing a joint return, the limit is $150,000.
4. How is the tax credit different from the $7500 tax credit that was enacted in 2008? The tax credit of 2008 is an interest free loan that has to be repaid to the Government is small amounts.
5. How do I claim the tax credit? It's quite easy, you claim it on your income tax return. Be sure to mention the tax credit to your tax preparer, so you don't miss the chance to claim the $8000 tax credit of 2009.
6. What types of homes qualify for the tax credit? Any home that you use as your primary residence, e.g., condos, single-family homes, manuafactured homes....
For more info, refer to the IRS website. http://www.federalhousingtaxcredit.com/2009/home.html
If you live in the Anchorage, Alaska area and would like more information about the $8000 first time home buyer tax credit, contact me.
Anchorage, Alska Real Estate 907-720-4663
Vanna Siackhasone, Anchorage Real Estate Specialist, 907-720-4663
This is a nice, clear and concise explanation of the different tax credits that have been available in the last year or so for first time buyers.
Thanks Christine.
Hi Vanna, this is very good explanation. I have noticed that often it is not made clear enought that the tax credit is in fact 10% and up to $8000. We have a lot of first-time home buyers who by below $80,000 and cannot expect the full refund.
exactly sIlvia. Some buyers are not aware that the tax credit is up to $8000 and first time buyers don't get the full amount unless they purchase something above $80,000.