Federal Tax Credits Available for First-Time Homebuyers
Federal tax credits enacted by Congress in early 2009 will be important for many first-time homebuyers.
The credit was designed to stimulate buying activity and help get the housing market moving again.and early indications show it is doing exactly that. In February alone, a record 844,000 prospective homebuyers visited a site set up by the National Association of Home Builders (FederalHousingTaxCredit.com) to learn about the new $8,000 tax credit.
Here are some of the details about the new tax credit:
- A "first-time homebuyer" is defined as someone who has not owned a principal residence during the three-year period prior to the purchase. For married couples, both spouses' ownership history is considered.
- It does not have to be repaid as long as you don.t sell the home for at least three years.
- The actual amount of the credit is 10 percent of a home.s purchase price, up to a maximum of $8,000.
- To obtain the credit, you must close on a home between Jan. 1, 2009 and Nov. 30, 2009.
- The full credit is available to single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000. For those making more, the credit is reduced or eliminated.
- The house must be your principal residence. It can be either a new house or a resale.
Remember, any house that will be used as a principal residence will qualify for the credit, so that includes not only single-family homes, but townhomes, condominiums, mobile homes and even houseboats. But strict time limits apply! You won.t want to miss this opportunity.
- Consult a tax professional for eligibility.
- For additional details visit