First-Time Home Buyer Tax Credit

While everyone is full of so much doom and gloom about the housing market, there is good news! The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009, and before December 1, 2009. And the best part of this is that you aren’t required to repay the credit, unless the home ceases to be your principal residence within the 36-month period, beginning on the date of purchase.

The Internal Revenue Service defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his or her spouse.  So if you haven’t owned a home in the past three years but your spouse has, neither you nor your spouse qualify for this credit. However, an unmarried joint purchaser may allocate the credit amount to any buyer who qualifies as a first-time buyer.

To apply for the credit, visit the IRS website to complete IRS Form 5405; First-Time Homebuyer Credit.  However, there are income limits. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

To obtain more information about the first-time buyer credit, visit the IRS site at: www.irs.gov.com or  www.federalhousingtaxcredit.com.

Now is a great time to purchase a home.  Interest rates are low and if you’re a first time home buyer, you qualify for this terrific credit.  Call me or email me to get started!!

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