$8000 First Time Home Buyer Tax Credit

After the $15000 tax credit for all home buyers tanked in the stimulus bill, it was then scaled back to $8000 first time home buyer tax credit. Not as much as $15000, but still a nice chunk of change that doesn’t have to be repaid. Even though the tax credit of $8000 is only up$500 from the one passed last summer, that one was more like a small interest loan that had to be repaid.

Hopefully this will help a little bit, home buyers are still going to have to qualify to buy home and have down payment of at least 3.5%. A lot thing that it is only delaying the inevitable of home prices still falling. Locally, we already seen an uptick in pending sales compared to years past and this was before the $8000 home buyer tax credit was even announced. It will be interesting to gauge the effectiveness of this credit.

A breakdown of First Time Home Buyer $8000 Tax Credit

Of course there is provisions of the $8000 home buyer tax credit, most people will find out that they will qualify. Here is what is known (that could change once somebody goes through the fin print):

Available to homes purchased between January 1st 2009 and December 1st 2009
Maximum tax credit is increased to $8000 or 10% of homes value
All owner occupied principal residences. This includes single family homes, Condos, Townhouses, Co-ops
Income limits to single filed return of gross income no more than $75,000 or $150,000 joint return
Do not need to refund the $8000 first time home buyer tax credit
The tax credit is available to first time home buyers only and must not have owned a home within the past three years
There is no recapture meaning that if you own the home for three years or more, then you don’t have to repay the tax credit due on sale. If you do sell the home without living in the home for three years, then there is a recapture of the tax credit paid on sale of the resident. Applied to homes purchased in 2009 only.
Termination of the opportunity to use the $8000 tax credit is December 1st 2009
Effective date is January 1st 2009

Applying for the credit should be fairly easy, just file your income taxes. If you have already purchased a home this year, then you file amended tax returns to receive the $8000 tax credit. For this just ask “the box” (if you used a computer program) or contact your tax professional to find out the next steps.

So there you have it, if you would like more information on the $8000 home buyer tax credit and are a first time home buyer in Minneapolis, St. Paul or surrounding Twin Cities metro area, then please contact me here. As always, make sure you consult your tax advisor on how this can help you. I am not a tax professional.