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First Time Homebuyers and Repeat Buyers Tax Credit

 

Happy Homeowners- Laura, Charlotte, and Chris

What’s the buzz all about? Take advantage of History in the Making.

 

Wow, Uncle Sam is finally giving back! As the hit TV show, The Jefferson's say  “We’re a Moving on up.... to the East side...." The American Recovery and Reinvestment Act of 2009 will go down in history as a time to make that move.

What's the catch? The catch is that First Time Homebuyer's can receive up to $8000 Tax Credit and Repeat Homebuyers can receive up to $6500 Tax Credit.

First Time Homebuyers

• Binding Contracts must be signed by April 30, 2010 with a home purchase completed by June 30, 2010
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000
• Home prices must be less than $800,000
• Income limits of $125,000 for individuals and $225.000 for married couples filing jointly
• Must be 18 years old or older and file an independent tax return
• First Time homebuyers cannot make purchases from relatives or ancestors, including spouse’s relatives
• Married couples do not qualify if either spouse has owned a home in the past 3 years
• Tax credits do not have to be re-paid unless the home is sold or ceases to be used as the buyer’s principal residence within 3 years after the initial purchase
• Taxpayers must submit a copy of the HUD-1 (closing statement) along with Form 5405 to claim the credit. You may state this claim on an amended 2009 income tax return
• HUD allows buyers using FHA-insured mortgages to apply tax refunds for down payment and closing cost expenses.

 

Qualified Service Members- Extended Duty

• Binding Contracts must be signed by April 30, 2011 with a home purchase completed by June 30, 2011
• Qualified Service Member is defined as a member of the uniformed services of the US military, a member of the Foreign Service of the US, or an employee of the intelligence community.
  
• Extended duty is defined by Qualified Service Members serving at least 50 miles away from home for a period in excess of 90 days

Repeat Home Buyers

• Binding Contracts must be signed by April 30, 2010 with a home purchase completed by June 30, 2010
  
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500
  
• Home prices must be less than $800,000
• Homebuyers must have owned a home for five consecutive years out of the prior eight years.
  
• Home purchases do not have to be more expensive than previous home purchases
• Income limits of $125,000 for individuals and $225,000 for married couples filing jointly
• Tax credits do not have to be re-paid unless the home is sold or ceases to be used as the buyer’s principal residence within 3 years after the initial purchase
  
• Homebuyers cannot make purchases from relatives or ancestors, including spouse’s relatives
• Taxpayers must submit a copy of the HUD-1 (closing statement) along with Form 5405 to claim the credit. You may state this claim on an amended 2009 income tax return

Information was taken from http://www.federalhousingtaxcredit.com/. We recommend you consult a Certified Public Accountant or Attorney for legal advice.