First-time Homebuyer Credit, explained
The newly signed Stimulus Bill has improved things for first-timer's .
Here's a thumbnail of the details.
Thanks to Jon Mastrude with Seattle Preferred Mortgage for his help!
For help with a new loan of any kind, Jon is your man!
206.948.7000 or email:
jpm@siteconnect.com
(This is NOT to be considered tax advice, and for specific questions and advice for your personal situation, visit a qualified tax advisor)
FIRST-TIME HOMEBUYER TAX CREDIT
As Modified in the American Recovery and Reinvestment Act
Major Modifications Italicized
| February 2009 FEATURE | CREDIT AS CREATED JULY 2008 APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008 | REVISED CREDIT: EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009 |
| Amount of Credit | Lesser of 10 percent of cost of home or $7500 | Maximum credit amount increased to $8000 |
| Eligible Property | Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence. | No change All principal residences eligible. |
| Refundable | Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser. | No change Purchasers will continue to receive refund for unused amount when tax return is filed. |
| Income Limit | Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000). | No change Same income limits continue to apply. |
| First-time Homebuyer Only | Yes. Purchaser (and purchaser's spouse) may not have owned a principal residence in 3 years previous to purchase. | No change Still available for first-time purchasers only. Three-year rule continues to apply. |
| Revenue Bond Financing | No credit allowed if home financed with state/local bond funding. | Purchasers who utilize revenue bond financing can use credit. |
| Repayment | Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing. | No repayment for purchases on or after January 1, 2009 and before December 1, 2009 |
| Recapture | If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale. | If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009. |
| Termination | July 1, 2009 (But note program changes for 2009) | December 1, 2009 |
| Effective Date | Purchases on or after April 9, 2008 and before January 1, 2009. Repayment to begin for 2010 tax year. | All revisions are effective as of January 1, 2009 |
