Facts About First Time Home Buyers Tax Credit

The American Recovery and Reinvestment Act of 2009 features an
$8,000 tax credit for fi rst-time buyers who purchase a home on or
after January 1, 2009 and before December 1, 2009.
· The temporary credit is only available for purchases made from Jan. 1, 2009 to before Dec. 1, 2009 and is equal to 10% of the cost of the home, up to a max credit of $8,000.
· Buyers claim the credit on their federal tax return to reduce their tax liability. If the credit is more than their total tax liability that year, the buyer will receive a refund check of the balance.
· Only first-time homebuyers can take advantage of the tax credit. A first-time buyer is an individual who has not owned a home in the last three years. For married joint filers, both must meet the test to take the credit on a joint return.
· Eligible properties include anything that will be used as a principle single-family residence - including condos and townhouses.
· There are income guidelines on the credit. Individuals with an adjusted gross income up to $75,000 ($150,000 jointly) are eligible for the tax credit.
· The new tax credit does not have to be repaid if the buyer stays in the home at least three years. If the home is sold before that, the entire amount of the credit is recaptured on the sale.
· Purchased homes under the 2008 $7,500 credit program will be required to repay over a 15 year period.