We have summarized the details of the 1st Time Home Buyers Tax Credit that was signed by President Obama in February. - The credit is $8,000 for individuals, $8,000 for joint filers, or $4,000 for married persons who each file separately. It is a credit, and you don't have to pay it back, but there are a few limitations.
- You must be a 1st time buyer... if you owned a "main" home within the 3 year period preceding your purchase, you do not qualify. You must purchase between January 1, 2009 and December 1, 2009. It is not applicable to refinances, only purchase.
- You must stay in the home for three years. This is important. It has to be your main home for three years, or you may have to pay the rebate back later.
- The credit is for 10% of the purchase price, up to $8,000. In other words, you would receive a $7,000 rebate on a $70,000 home.
- If you make more than $75,000 ($150,000 jointly) the rebate phases down (we haven't seen a chart yet,) but most new residents will be eligible for the full $8,000.
The Key word is: REBATE. - Let's say you buy a $150,000 home before December 1, 2009.
- You make $50,000.
- You file in 2009 and you would normally owe:
- $1,000 in taxes: you get back a check for $7,000.
- $0 in taxes: you get back a check for $8,000
- You are owed $1,000 by the IRS: you get back a check for $9,000.
IRS Press Release About $8000 Tax Credit IRS FORM 5405 Please call a member of The Mega Agent Real Estate Team at (205) 908-8698 if you have any questions. |