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2/18/2009 The New First Time Homebuyer $8,000 Tax Credit. 6 Things You Need To Know Now

First-Time Home Buyer Tax Credit: 6 Things to Know

 

While the proposed $15,000 home-buyer tax credit died in negotiations between the House and the Senate, the $787 billion stimulus bill that President Barack Obama signed into law Tuesday includes a similar--albeit smaller--measure designed to help revive the real estate market. Here are six things you need to know about the freshly-enacted $8,000 first-time home-buyer tax credit that was included in the stimulas bill signed into law on February 17th 2009.

1. Eight grand, new buyers: The tax credit included in the economic stimulus legislation is much narrower than the $15,000 proposal. This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. But unlike an earlier $7,500 home buyer tax credit, this one does not have to be repaid.

2. First time buyers defined: For the purpose of this legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.) That means if you've owned a vacation home--but not a principal residence--within the past three years, you would still qualify for the credit.

3. 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit. Anyone who bought a home last year won't be able to take advantage of it.

4. Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that's $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.

5. Refundable: Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability.

6. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)

As always if you have any questions related to this new piece of legislation please do not hesitate to contact either Di Anne or myself we are always here to help in any way that we can.


Link To FAQ's About $8,000 First Time Home Buyer Tax Credit



Regards,


Drew Taylor
205-283-1602
11/13/2008 Take Advantage Of The $7,500 Home Buyer Tax Credit While You Can!
I am sure that by now you have all heard of the new $7,500 tax credit that the United Sates government is offering to those individuals looking to either purchase their first new home, or purchase a home in their name for the first time in at least three years. To good to be true you say? Well, not so fast. If you purchase a new home before April 15, 2009 and it is either your first home, or you have not owned a home in your name in three calendar years then you are eligable for this tax credit in the form of an interest free loan when you file your 2008 year tax return. That's right, this is an interest free loan that you must pay back in increments of at least $500 per year until the loan is paid back in full. Or if you decide to sell the home before this loan is paid off then the balance of the loan will be due when you close on the sale of your home.

There are a lot of unique ways that some of our clients have been taking advantage of this tax credit. The most unique that we have seen is when the purchaser will use the credit to repay a realtive when that relative helps with their FHA loan down payment assistance. It works like this. The FHA (Federal Housing Authority) will make government sponsored loans (up to $271,000 in Jefferson County) where the purcaser only has to put down 3.5 of the purchase price. This 3.5 down payment can be in the form of a gift from an immediate family member. Some of our clients have been borrowing $7,500 for their down payment from an immediate family member and then when they recieve their $7,500 tax credit they immediately repay their relative for the loan. Clever way to get into an new home isn't it.

An example of this scenario would be if you wanted to purchase a home valued at say $150,000 (a fair ammount for a first time home buyer). The minimum down payment on such a home (with an FHA loan) would be $5,250 or 3.5 of the purchase price. Your family member could temporarily gift you the $5,250 down payment and then when you recive your $7,500 homebuyer credit in you tax refund you will be able to pay your relative back in full and have some left over to do with whatever you would like.

As always their are a lot of finite details that we have not discussed in this segment. This is why we recomend that you give us a call. We work with several knowledgable mortgage professionals that are more than ready to asess your needs and find the best possible loan for you and your family.

And don't forget you have to find that perfect home first. Remeber, we here at Team Taylor are always here to help you find the best home possible in and around Birmingham, AL. When it comes to real estate in Birmingham, AL knowbody knows it better than we do.
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RE/MAX Alabama | Drew & Di Anne TEAM TAYLOR, RE/MAX Advantage Central | 2964 Columbiana Rd, Birmingham, AL 35216 | (205)979-9854 | Contact Me by E-mail