Good News for the First Time Home Buyers! Homes purchased before December 1, 2009 are eligible for an $8,000 tax credit. It really is a great time to buy.
HOMEBUYER TAX CREDIT
Buy a home and get a tax break! As part of the housing and Economic Recovery Act of 2008, a First Time Homebuyer Tax Credit is now available But this special tax break ends Dec. 1, 2009. A homebuyer tax credit has been available for first-time homebuyers in Washington, D.C. for many years, and now first-time homebuyers nationwide can take advantage of a similar benefit. In this information, we will discuss some of the provisions of the credit and explain how to use it.
AM I ELIGIBLE?
First-time homebuyers who purchase a principle residence before December 1, 2009 are eligible. If you (and your spouse, if married) have not owned your principle residence for a 3 year period before your purchase, and you have never taken advantage of the DC first-time homebuyer credit, you qualify as a first-time homebuyer.
HOW DOES IT WORK?
Like all tax credits, it will directly reduce the total amount of taxes you owe. When you file your taxes, for the year you purchased our home (2008-2009), you will be able to subtract the amount of the credit from your Federal income tax liability, increasing the size of your refund or reducing the amount you owe. For example, you file your ‘normal’ tax return and find that you owe $2,000 in taxes. With this credit, your tax liability could be lowered by $8000 – which means, you instead get a $6,000 tax REFUND check from the IRS.
HOW BIG IS THE TAX CREDIT?
The tax credit is equal to 10% of the purchase price of your home up to $8,000. The full credit is available for single individuals whose adjusted gross inclome is less than $75,000 and your home purchase qualifies you for the full credit, the credit phases out according to the dollar amount (or percentage if less than $8,000).
This is information was provided by Chris Hopkins with Myers Park Mortgage. Phone: (704) 902-5586