On Tuesday, President Obama signed into law the new stimulus plan which included a new homebuyer tax credit for up to $8,000. There are some improvements over the previous first-time homebuyer tax credit.
The most important items to note with the new first-time homebuyer tax credit, include:
- The $8,000 tax credit does not have to be repaid like the previous one. With one caveat, you must live in the home for three years as your principal residence. I’ve seen lots of mis-information on this point just simply stating that you don’t have to re-pay it. Stay for three years and that is correct.
- This is available to first-time homebuyers. Under the legislation, this is defined as anyone who hasn’t owned a home as their principal residence in the last three years. It is important to note this distinction as you may not have thought you qualified if you weren’t a real first-time homebuyer. So you could still qualify if you own a vacation or investment property or if it’s been more than three years since you owned a principal residence.
- If you’re married, the first-time homebuyer criteria applies to both spouses. So if one of you don’t qualify, then neither of you do.
- This credit is only good for homes purchased from January 1, 2009 through November 30, 2009. If you purchased your home in 2008, then refer to the previous first-time homebuyer tax credit to see if you qualify.
- Your modified adjusted gross income (MAGI) must not exceed $75,000 for singles and $150,000 for married taxpayers. What the heck is MAGI? – this is essentially what you claim as all of your income on your tax return before taking deductions.
- The tax credit is capped at $8,000 or 10% of the purchase price, whichever is less.
- Since this tax credit is refundable (you can receive it as a tax refund after filing your federal tax return), the immediate advantage is what you can do with it. And even though this is related to a 2009 purchase, you can still claim the credit on your 2008 tax return. And if you’ve already filed your 2008 tax return, you can amend the return to claim the tax credit.
- Consult a tax professional for the finer details of the tax credit.
Given that this is a monumental opportunity to become a new homebuyer, we will be in the office from 1pm-5pm on Friday, February 20, 2009 to talk to homebuyers who have more questions about the $8,000 tax credit or are ready to get started on the path to home ownership.
If this time does not work for you, feel free to contact us and we can schedule a private consultation with you.
Office Address:
Keller Williams Realty
3350 Atlanta Road
Smyrna, GA 30080
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