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Home > $8,000 Homebuyers Tax Credit Information
The U.S. Federal Governement is offering a historic $8,000 home buyers tax credit. If you've been waiting to buy your first home (or haven't owned your primary residence for three years or more), the time to act is now! With mortgage rates at historic lows, sensible home prices, and now this unbelievable tax credit, there may never be a better time to buy.
HOW IT WORKS
- AM I ELIGIBLE? You qualify if you are a first-time home buyer or have not owned a principle residence during the previous three years. Even if you own a vacation home or rental property, you may claim the credit as long as it is not your principle residence. The price of the home you are buying cannot exceed $800,000.
- HOW MUCH CAN I CLAIM? The tax credit is equal to 10% of the home's purchase price up to a maximum of $8,000.
- ARE THERE INCOME LIMITS? You may claim the full credit if your income is $125,000 or less and $225,000 or less for married couples filing jointly. A partial credit may be claimed up to an income of $145,000 ($245,000 for joint filers).
- WHEN MUST I PURCHASE? You must purchase your home between today and June 30, 2010. The purchase date is considered the date closing occurs and title is transferred to the new homeowner.
- WHAT TYPE OF HOMES ARE ELIGIBLE? Any home that will be considered your principle residence qualifies, including single family detached homes, townhouses and condominiums, mobile homes... even houseboats!
- IS THE CREDIT THE SAME AS A TAX DEDUCTION? No, it's more valuable since it is applied against your actual tax liability, not your income. For example, if you owe $8,000 on your federal tax return and qualify for the full credit, you would owe nothing to the IRS. Plus, the credit is refundable -- if your tax liability is less than the amount of your credit, you will recieve a check from the government for the difference.
- HOW DO I CLAIM MY CREDIT? It's very easy and no pre-approval is required. When you file your 2009 or 2010 tax return you will fill out an IRS form 5405 to calculate your credit. Then, you'll enter that on line 69 of your 1040 form. Please consult your tax advisor.
- IS THE CREDIT DIFFERENT THAN THE CREDIT CONGRESS ENACTED IN JULY 2008? Yes, in addition to a maximum new credit of $8,000 (vs. the previous $7,500), this new credit does not have to be repaid and is a true tax credit. The former program was essentially an interest-free loan.
- ARE CURRENT HOMEOWNERS ELIGIBLE FOR ANY TAX CREDIT? Current homeowners are eligible for a $6,500 credit, providing that the homeowner has used the home as a principle residence for five of the past eight years.
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