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Raina's Blog

By Raina Pierce | Broker in Federal Way, WA

First Time Buyers Tax Credit

 

The President signed the stimulus package on February 17, 2009 and in it are changes to the current Home Buyer Tax Credit.  Below are the details of this tax credit and how it can help first time home buyers get into a home.

 

· First-time home buyers purchasing any kind of home-new or resale– are eligible for the tax credit.

 

· The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase.

 

· The tax credit is equal to 10% of the home’s purchase price up to a maximum of $8,000.

 

· The home purchase must occur on or after January 1, 2009 and before December 1, 2009.  For purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.

 

· The credit does not need to be repaid as long as the home buyer uses the residence as a principal residence for at least three years.

 

· The buyer will claim the credit on their federal income tax return.  The fact
that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

 

· Single taxpayers with incomes up to $75,000 and married couples withincomes up to $150,000 qualify for the full tax credit.

 

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