You must have heard by now that the house and senate passed a modified version of the stimulus bill that includes a tax credit for first time home buyers. The final version of the bill that passed includes the following:
1. A tax credit of 10% of the purchase price up to $8000.
2. Only first time home buyers purchasing a primary residence are eligible. The definition of a first time buyer includes someone who has not owned a home in the last 3 years.
3. The credit can be applied to a home purchased between January 1, 2009 – November 30, 2009. (I’ve also read that the home must be purchased by December 31, 2009 so check with your accountant or tax advisor)
4. The credit does not have to be paid back as long as you live in the home for 3 years or more. If you sell before owning the home for 3 years, the entire credit will be recaptured upon the sale of the home.
5. Your taxable income must be less that $75,000 (single filer) or $150,000 (joint filers).
Here’s a handy chart from the National Association of Realtors: First Time Homebuyer Tax Credit
The above terms were compiled based on everything I’ve read about the tax credit. Please check with your accountant or tax advisor to discuss how this tax credit might benefit you.
I’d like to clarify something – this money cannot be used towards your down payment. Once you purchase a home you are eligible to claim this credit on your 2009 tax return. You won’t actually receive the refund check until 2010.