$ 8,000 Tax credit for Homebuyers Explained

February 26, 2009
Matt Isleib

 

If you have not already heard this is the part that you need to pay close attention. Under the new stimulus bill that President Obama just signed was the extension of the “first time home buyer tax credit.” If you are a first time home buyer and I will clarify what that constitutes you are potentially eligible for an $8,000 tax credit. You need to close on the purchase between the dates of Jan. 1, 2009 and Nov. 30, 2009.

 

A very important part to understand is the “tax credit” is refundable. When I say refundable I am referring to a tax refund. A couple scenarios here will show what I mean. If you do your tax return and are looking at a refund you can get your tax refund as well as the $8,000 tax credit. Same would hold true if you owe Uncle Sam money after figuring your taxes and you apply the tax refund, it could alleviate your tax liability. Keep in mind that you need to qualify for the credit. Here is a list of what qualifies and what would not.

 

·         Dates are from Jan 1 –Nov 30 2009

·         $8,000 or 10% of the homes worth whichever is less

·         First time home buyers only

·         First time home buyer may also be someone who previously owned a home but not in the last three years

·         You must live in the home for a minimum of three years

·         Individual borrowers must make less the $75,000

·         Joint borrowers combined must make less than $150,000

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