Are you interested in buying a new home this year and have questions about the 8000 tax credit? You are not alone.
UPDATE: The 8000 Tax Credit Has Been Extended and Expanded:
$8,000 First-time Home Buyer Tax Credit Expansion Details
- The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
- The tax credit does not have to be repaid.
- The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
- The tax credit applies only to homes priced at $800,000 or less.
- The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
- For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
- For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
The $6,500 Move-Up / Repeat Home Buyer Tax Credit Details
- To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
- The tax credit does not have to be repaid.
- The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
- The tax credit applies only to homes priced at $800,000 or less.
- The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
-
Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
UPDATE: Can The 8000 Tax Credit Be Used As A Down Payment?
Some of the most common questions that we have gotten about this program have been answered by the National Association of Homebuilders who have set up a website to specifically answer these questions.
- Who is eligible to claim the tax credit?
- What is the definition of a first-time home buyer?
- How is the amount of the tax credit determined?
- Are there any income limits for claiming the tax credit?
- What is “modified adjusted gross income”?
- If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
- Can you give me an example of how the partial tax credit is determined?
- How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
- How do I claim the tax credit? Do I need to complete a form or application?
- What types of homes will qualify for the tax credit?
- I read that the tax credit is “refundable.” What does that mean?
- I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
- Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
- Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
- I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
- I am not a U.S. citizen. Can I claim the tax credit?
- Is a tax credit the same as a tax deduction?
- I bought a home in 2008. Do I qualify for this credit?
- Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
- If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
- For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
 |  |
{ 36 trackbacks }
{ 14 comments… read them below or add one }
Can a first-time homebuyer that buy’s into a coop take advantage of the $8000 Federal Income Tax Credit?
I practice real estate primarily in Princes Georges County, Maryland.
Can a relative sell to a relative( Mother to Daughter & Son in Law) and take advantage of the $8000 for fisrt time home buyers?
@Carlos,
To my understanding, it doesn’t matter who you buy the home from, what matters is that you can qualify as a first time home buyer. Double check with your accountant for sure! You can also visit:
http://www.federalhousingtaxcredit.com/2009/index.html
Justin
i am a 1st time home buyer and i bought a house legitimately but it was from a parent how do i get the tax credit. or at least get zero down
my husband and i are getting ready to buy a house on a rent to own basis, can we still get the tax credit or does it need to be a loan?
If I do a rent to own lease do I qualify for the tax credit?
I’m going to be purchasing a cheap home cash for $32,000 can I qualify for the tax credit? and it will be 1,000 for every 10,000? also i will be closing in september how will it work?
@ adam a,
Here is the answer to your first question:
http://www.federalhousingtaxcredit.com/2009/faq.php#3
And after you close, you can find the form to complete on the IRS website, complete it and turn it in.
Here is a link with exact instructions:
http://www.federalhousingtaxcredit.com/2009/faq.php#9
Good Luck!
Justin
I know alot of people that received the tax credit but did not purchase a home, what will be the penalties if any and will they have to pay that money back.
My son just closed on his first home 5 days ago he signed as a first time buyer but my wife and I are on the morgage as well for co buyers. Would my son be eligible for the tax credit?
Just had a question from a client – we have a buyer that wants to purchase his home on land contract. Would a land contract be eligible for the tax credit? Thank you.
Judy, that’s a great question regarding buying on a land contract. I am not too well versed in them (land contracts), but understand it to be a purchase on an installment plan where the purchaser doesn’t actually own the property until the installment plan is completed. So, the seller remains the actual owner of record. Not knowing the full legalities, it is safe to assume the the buyer doesn’t really become a homeowner until they actually own the property, and would then not qualify for the tax credit. I could be wrong though. This is one that I would have your buyer consult with their tax professional… just to be safe.
Gary, I’ve had this come up many times, especially with a parent co-borrowing for their kid on an FHA loan. In all cases that I personally know of, the buyer was given the tax credit. However, I’ve heard conflicting responses from individual tax pros. Some say no problem, the kid is the homebuyer. Other say that the kid qualifies for half of the tax credit. This is another one that I would verify with your tax professional. If they advise you and prepare your taxes, they will stand behind you if it becomes an issue later.
S. Smith I know you wrote this a while ago, but I wanted to respond. There are lots of cases where people submitted for the tax credit without actually buying a home… I have heard it numerous times on the news. To those people… watch out. It’s only a matter of time before it’s found out. Logic would say that there will be penalties and that they would have to pay it back. After all, if they got a homebuyer tax credit and didn’t actually buy a home, they really didn’t qualify for the credit.
Have a question for my friend. She and her husband are both retired, so they don’t file income taxes anymore. They haven’t owned house for more than 3 years. Now they want to buy a house. Would they be eligible for the tax credit? If yes, how does it work? Do they file tax on the house they purchased?