The new law is for first-time home buyers or those who have not purchased a home in the past three years. This
$8,000 tax credit does not have to be repaid, unlike the tax credit passed in the summer of 2008.
The program has been extended until December 1, 2009, so that consumers can utilize it during the critical summer and fall buying months.
In order to make sure that you receive your tax credit for a December 1st closing, you should go under contract by November 1st.
FIRST-TIME HOME BUYER TAX CREDIT
As modified in the American Recovery and Reinvestment Act
Major Modifications Italicized
February 2009
Amount of Credit
Maximum credit amount increased to $8,000.
Eligible Property
Any single family residence (including condos, co-ops, townhouses) that will be used as a principle residence.
Refundable
Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit is refunded to the purchaser.
Income Limit
Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000
($150,000 for a joint return). Credit phases down for adjusted gross income above those caps ($95,000 and
$170,000.
First-time home buyers only
Yes. Purchaser (and spouse) may not have owned a principal residence in 3 years previous to purchase. You are then considered a "First-time Home Buyer" again.
Repayment
No. No repayment for homes purchased on or after January 1, 2009 and before December 1, 2009.
Recapture
If home is sold within three years of purchase, the entire amount of credit is recaptured on the sale. Applies only to homes purchased in 2009.
Termination
December 1, 2009.
Effective Date
All revisions are effective as of January 1, 2009.
For additional information, go to
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