Please always consult a qualified tax advisor or legal professional about your unique situation.
November 6th 2009
Homebuyer Tax Credit Extended...and Expanded
President Obama signed a bill into law today that includes provisions, not only extending the $8,000 tax credit for first-time homebuyers until April of 2010, but expanding the stimulus to include a $6,500 tax credit for current owners who purchase a home.
Among the changes included in the tax credit extension, income eligibility has been increased to include singles making up to $125,000 per year and married couples making up to $225,000 per year. Purchasers must now attach documentation of their purchases to their tax returns.
For a detailed comparison of the 2009 homebuyer tax credit versus the extension, click here.
For FAQ on the homebuyer tax credit changes, click here.
Quick Summary of the First-Time Homebuyer Credit
For 2008: up to $7,500, the credit is paid back over 15 years.
For 2009: up to $8,000, the credit does not need to be paid back.
"First-time" buyer means an individual who has not owned a principal residence in previous three years.
2009 First-Time Homebuyer $8,000 Tax Credit:
The enhanced homebuyer tax credit makes it easier to buy your first home – through a tax credit of up to $8,000 in government incentives as a part of the economic stimulus plan. And with mortgage rate at all-time lows and choices at all-time highs, now may be the right time to buy.
10% of the home price, up to $8,000.
Who Gets It?
First-time homebuyers, or people who have not owned a home in the preceding 3 years.
How Does It Work?
It shows up as a credit on your income tax.
For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase.
It’s for principle residence only, and only for homes purchase in 2009. If you make more than $75,000 a year ($150,000 jointly) the credit is less and at higher incomes it phases to zero.
Like any good thing, there has to be rules. You have to buy before December 1, 2009, and live in the home as your principal residence for at least 3 years. Plus there are income guidelines, and other checkpoints to see if you qualify. Ask your tax advisor for details on how the new law affects you.
Other Resources About the Tax Credit:
Tax Form to Claim the First-Time Homebuyer Credit:Form 5405
(PDF, 3 pages including instructions)