home buyer tax credit
So, I got an email today with a very simple way to see the first time home buyer tax credit and thought I would post it. If you are a first time home buyer I hope you find it helpful – If you are looking in Northern Virginia, Loudoun County, and Fairfax County or over the bridge in Maryland, all the way north to Baltimore, I hope you will give us a call too. Btw – Tell me you are a first time buyer who read this post and you maybe eligible for up to $8,000 more when you buy through one of our agents.
Here is a cursory breakdown between the original tax credit in July 2008 and the new credit that came out in February’s American Recovery and Reinvestment Act.
|
Feature |
Original credit created by July 2008 |
Revised credit – Feb. 2009 |
|
Definition of first time home buyer |
Buyer (and buyer’s spouse) may not have owned a principal residence for 3 years prior to purchase |
No change |
|
Amount of tax credit |
10% of the purchase price or $7,500, whichever is less |
Maximum credit amount increased to $8,000 |
|
True credit or repayment? |
The credit must be repaid – 6.67% of credit or $500 each year for 15 years, starting with the 2010 tax filing; if the home is sold before this, the balance must be repaid at closing |
True credit – unless the home is sold within three years, at which point the first-time homebuyer who is now the seller) must repay the entire amount to the IRS at closing |
|
Effective dates |
Applies to homes purchased between April 9, 2009 and December 30, 2008 with repayment starting in 2010 |
Applies to homes purchased between January 1, 2009 and November 30, 2009 |
|
Tax implications |
Reduces ( or can eliminate) income tax liability for the year of purchase; e.g., buyers will pay less tax or receive a bigger refund |
No change |
|
Eligible properties |
Any single family residence (including condos, co-ops, townhouses, etc) that will be used as a principal residence |
No change |
|
Income limits |
Full credit for individuals with a modified adjusted gross income of $75,000 or less ($150,on a joint return); partial credit for income from $75,000 to $95,000 ($150,000 to $170,000 on a joint return) |
No change |
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