You've got questions? I've got answers! First-Time Homebuyer Tax Credit

I have run into a lot of people that have questions about the $8,000 first-time homebuyer tax credit. Here are a few answers:

Q: Who qualifies?

First-time homebuyers who puchase homes between January 1, 2009 and November 30, 2009.

To qualify as a "first-time homebuyer" the purchaser or his/her spouse may not have owned a residence during the three years before the purchase.

Q: Which properties are eligible?

The 2009 first-time homebuyer tax credit may be applied to primary residences, including: single-family homes, condominiums, town-homes and co-ops.

Q: How much will the credit be?

The maximum allowable credit for homebuyers is $8,000. Each homebuyer's tax credit is determined by two factors:

1. Price of the home- the credit is equal to 10% of the purchase price of the home, up to $8,000.

2. Income- single buyers with incomes up to $75,000 and married couples with incomes up to $150,000 may receive the maximum tax credit.

Q: If the buyer(s)' income exceeds these limits, can he/she still get a credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for homebuyers filing jointly.

The amount of the tax credit decreases as his/her income approaches the maximum limit. Homebuyers earning more than the maximum qualifying income- over $95,000 for singles and over $170,000 for couples- are not eligible for the credit.

Q: Will the tax credit need to be repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

Q: Is it too late to start the homebuying process in time to take advantage of this credit?

No, but you need to start soon. What we're hearing from mortgage brokers is that it takes anywhere from 45-60- days to get to the closing table of a normal transaction. If you start today, you'll still have time. If you want to take advantage of this amazing tax credit, contact me today!


















Source: Realtor.org