0 First Time Home Buyer Tax Credit

Now is an excellent time for first time home buyers to take their first step into real estate. Not only are interest rates near historic lows, but a tax credit of up to $8,000 is available for qualified first-time home buyers!

Who is Eligible:

• The $8,000 tax credit is available for first-time home buyers only.
• The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
• All U.S. citizens who file taxes are eligible to participate in the program.

Payback Provisions:

• The tax credit is a true credit. It does not have to be repaid. The only repayment requirement is if the home owner sold the home within three years after the purchase.

Effective Dates for the Tax Credit:

• First-time home buyers would receive an $8,000 tax credit for the purchase of any home on or after January 1, 2009 and before December 1, 2009. To qualify, you must actually close on the sale of the home during this period.

Tax Credit is Refundable:

• A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference.

Example 1: If you owe $5,000 in federal income taxes, you would not owe any money to the IRS and receive a $3,000 payment from the government.

Example 2: If you are due to receive a $1,000 tax refund from the government, your refund would grow to $9,000 ($1,000 plus $8,000 from the home buyer tax credit).

Types of Homes that Qualify for the Tax Credit:

• All homes, whether single-family, townhomes, or condominium units will qualify, provided that the home will be used as a principal residence.
• Also includes newly-constructed homes.

Working with first time homebuyers to find their perfect place is always a fun and rewarding process. Click here to visit our website and begin the search for your next home, or give us a shout to do the searching for you. We look forward to hearing from you!

-Eric

For more details on the tax credit, click here.