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The Congress has passed legislation to provide you as a first-time buyer up to a $8,000 tax credit. For almost all taxpayers, this amounts to $8,000 cash, as it is a refundable tax credit. This means that even if you have no tax liability at the end of the year, you’ll actually get a check for $8,000. The money is a gift, and does not ever have to be repaid.

You probably guessed restrictions were coming: The new tax credit offers a larger tax credit, but it also sports a laundry list of fine print-like restrictions, from the date of purchase to the buyer’s income.

Some Details:

  • The $8,000 (for all homes over $80,000) tax credit is for first-time home buyers only.
  • The tax credit does not have to be repaid. Great news!
  • The tax credit is equal to 10% of the home’s purchase price up to a maximum of $8,000 – that’s where the $80,000 home number comes in.
  • The credit is available purchases of homes on or after January 1, 2009 and before December 1, 2009.
  • There are incomes levels attached.  The limits are as follows:
    • Single taxpayers with incomes up to $75,000 qualify for the full tax credit.
    • Married couples with incomes up to $150,000 qualify for the full tax credit.

The spirit of the law is to aid first-time home buyers purchasing any kind of home—new or resale. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, and this is a biggie, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.

It’s only March but we encourage buyers who want to use this to avoid having complications push closing beyond the deadline.  Remember, closing can be 6-8 weeks AFTER a contract is signed.  If you have any questions, please call us! 626 296-2900