We've all been hearing a lot the past couple of weeks about the first-time home buyer tax credit. Here it is in a nutshell for you. Notice that even if you have owned a home previously, you still qualify for this program if you have not owned a home in the past 3 years.
The American Recovery and Reinvestment Act of 2009 contains a provision to assist / encourage first-time home buyers with a home buyer tax credit of $8,000. Below is a brief synopsis of the program.
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| Amount of the Credit | Lesser of 10% of the cost of the home or $8,000 |
| Eligible Property | Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence |
| Refundable | Reduces income tax liability for the year of purchase. Any unused amount of the tax credit is refunded to the purchaser |
| Income Restriction | Individuals with an adjusted gross income of less than $75,000 ($150,000 for a joint return) can receive the full tax credit amount. The program phases out completely above $95,000 per individual and $170,000 for a joint return. |
| Who is a first-time buyer? | Any purchaser who has not owned a principal residence in the past three years. |
| Revenue Bond Financing | Buyers can take advantage of this credit even if local or state bond financing is utilized |
| Repayment | This credit contains a recapture clause that will require that the entire credit is repaid if the home is sold within three years after purchase. |
| Effective Dates | For purchases between January 1, 2009 and September 1, 2009 |
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