Those of us in the Real Estate business commonly assume that buyers are well-informed about the First Time Buyers tax credit program. But as I deal with new buyers, I am constantly amazed at the number of buyers who would qualify for this program that are totally unaware of its existence.
The First Time Home Buyers Tax Credit is a very simple program for new buyers. The basics of it are:
- Buyers who have not owned a home in the last three years qualify.
- The credit is 15% of the purchase price of a home, with a maximum of $8,000. (so a home that costs more than $80,000 qualifies for the maximum credit)
- Income limits for buyers are $75,000 for a single buyer or $150,000 for married couples filing a joint return.
- New homes and re-sale homes both qualify. The sale of the home MUST close no later than November 30, 2009
It is extremely important to understand that this is a TAX CREDIT, and not just a tax deduction. A credit means that the buyer will get the full amount of the tax credit, regardless of the taxes they paid or owe.
It is also very important to know that anyone buying a home in 2009 can actually file for this tax credit on their 2008 taxes – even if they have already filed their 2008 taxes.
One last note – there has been a lot of talk about buyers being able to use the tax credit as their down payment. There has been proposed, but it is not a reality at this time.
I have added a couple of very informative links below, for anyone wanting to get more information about it.
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