The New Stimulous 2009 Federal Housing Tax Credit

Rumors aren’t facts and you need facts.  The National Assocation of Home Buiders wants to help you understand the new legislation.

Here are the basics of the up to $8,000 tax credit for first-time home buyers:

• Only “first time home buyers” are eligible, but if you or your spouse haven’t owned a home (“principal residence”) in at least three years, you now re-qualify as a “first time buyer”.
• If you co-purchase with another individual, such as a parent, only your eligibility matters.
• You can purchase a new or resale home, but you must purchase the home as your principal residence (where you live).
• You do not have to repay this tax credit, it is not a loan like the previous legislation!
• You must purchase a home on/after January 1, 2009 and before December 1, 2009.  Purchase your new home this year January – November.  Don’t wait until 2010 or even December 2009!  2008 home purchases are not eligible, but may be eligible for 2008 credits/deductions.  You can use your 2009 purchase on your 2008 taxes.
• Your tax credit is 10% of the cost of the home, up to $8,000.  If you purchase a $200,000 home, your tax credit is $8,000.  If you purchase a $60,000 home, your tax credit is $6,000.
• To qualify for the full credit, a single person must make no more that $75,000 and a married couple must make no more than $150,000.  Partial credits are available if you earn beyond this limit.  If you earn beyond this limit, I can help you determine your potential credit.
• Claim your credit on IRS form 5405 & Line 60 of your 1040 when you file your 2009 taxes early in 2010 or when you file your 2008 taxes this year (this can be used on your 2008 taxes!).
• If you owe less in taxes than your credit amount, the IRS will send you a refund check.

Related posts:

1. Economic & Housing Law: Capital Gains Reform
2. $8000 First Time Homebuyer Credit Expires Soon
3. Housing starts expected to rebound slowly