The First Time Home Buyer Credit as Part of the Stimulus Package (New & Improved!)

Okay.  Updating my update on the First Time Home Buyer Tax Credit. Here is a closer look at the new and improved First Time Buyer Credit as we have seen it passed as part of the American Recovery and Reinvestment Act or the Stimulus as played on TV:

1. The $7,500 credit (that was to be paid back) will now be $8,000 or 10% of the purchase price not to exceed $8,000 and it  WILL NOT HAVE TO BE PAID BACK.  A TRUE CREDIT!!
2. Eligible property includes any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence (no change from previous bill.)
3. Income limitations are the same.  Full amount of credit available to individuals with a gross adjusted income of no more than $75,000 ($150,000 on joint return.)  Phases out above those caps not to exceed $95,000 & $170,000 (no change.)
4. THIS REMAINS IN EFFECT ONLY FOR FIRST TIME HOMEBUYERS! First time homebuyer is anyone who has not owned a principal residence 3 years previous to purchase (no change.)
5. Recapture.  If the home is sold within 3 years of purchase the entire amount of the credit is recaptured upon sale.  This applies only to homes purchased in 2009.
6. Still a small window of opportunity.  This expires on December 1, 2009.
7. Effective date.  All revisions to the old bill are effective as of January 1, 2009.  Translation:  if you purchased in after January 1, 2009 and before December 1, 2009 and meet all the other criteria this bill is for you.  If you purchased in 2008 you do not qualify.  The $7,500 credit is still in play for you just not the new one.
8. NEW UPDATE…LEARN HOW SOME CAN USE THE CREDIT AT THE CLOSING TABLE AND NOT HAVE TO WAIT!!

So we have increased the credit, extended the termination date on the credit and made it a true credit.  No payback if you don’t sell the property within 3 years of purchase.  I’ll take it!  I was hoping for a little less restriction (all buyers-not just first time buyers) but it has improved.

Click Here to Download a PDF version of the First Time Home Buyers Credit.

**From reading you can gather that I am a Real Estate Agent.  That being said please go over all of this information with your accountant or whoever does your taxes.  Make sure you qualify and meet all the requirements in order to take advantage of this credit.  Good luck! **