Once the clock strikes midnight on Monday, November 30, 2009, the $8,000 first-time homebuyer tax credit established under the American Recovery and Reinvestment Act will be gone. The expiration of the tax credit carries the loss of up to $8,000 for those renters interested in homeownership, or those who may have owned a primary residence before, but have not owned an interest in a primary residence in the past three years.
The stipulations surrounding the $8,000 first-time homebuyer tax credit include:
• Available to first-time homebuyers only, which includes buyers who have not owned an interest in a primary residence within three years of the closing date
• The home must be a primary residence only, which must be purchased and closed between January 1, 2009 and November 30, 2009
• The tax credit is equal to 10% of the home’s value, up to a maximum of $8,000 (married couples filing separately are eligible for a maximum tax credit of $4,000 each)
• First-time homebuyers must live in the primary residence for at least three years (If the homeowner moves, sells or leaves the primary residence for any other reason within the first three years, the tax credit must be repaid)
• Those eligible for the full $8,000 include single, first-time homebuyers with an income up to $75,000, or couples filing jointly with an adjusted gross income up to $150,000
• The tax credit does not have to be repaid, unless the homeowner moves, sells or leaves the primary residence for any other reason within the first three years of the purchase
Additionally, first-time homebuyers who may have purchased a home in 2009 may not be aware that they do not have to wait to file their 2009 tax returns to get all or part of their $8,000 tax credit. They simply have to have their 2008 returns amended and the funds will become available now. The $8,000 can be put to a variety of uses, including work on the house, purchasing furniture to furnish the home or to simply put aside as reserves for future mortgage payments.
Coupled with extremely low current mortgage rates and home values drastically declined, the $8,000 first-time homebuyer tax credit makes purchasing a home before November 30 as attractive as ever. Act now before it’s too late!
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