There seems to be a lot of misinformation floating around with real estate agents and home buyers on the 2009 Federal Tax Credit of $8000. Here's some of the most commons questions.
Who Qualifies?
- Single people earning less than $75,000 modified adjusted gross income
- Married people earning less than $150,000 a year combined modified adjusted gross income
- First Time Home buyers or people that have not owned a home in the past 3 years
- Investors do not qualify
When do I have to purchase by?
- Homes must be purchased and closed by December 1, 2009.
What kind of home can I buy?
- Any kind of home, single family, town home, condo, manufactured homes and multifamily as long as it's owner occupied
Do I have to repay the $8,000?
- There is no payback required if you stay in the home as your primary residence for 3 years.
What if I'm buying this home with someone else?
- If you are married you both have to be first time home buyers
- If you are not married, only 1 person has to be a first time home buyer, the first time home buyer can claim it on their taxes.
What if we make more than $150,000?
- If you make more than $150,000 there is a phase out portion for couples that earn up to $170,000 a year. So for example, if you earn $160,000 a year you could qualify for half the credit of $4,000.
Can I use it for down payment?
- This is not a down payment assistance program. You must still come up with your down payment of at least 3.5%.
What if I don't normally owe $8,000 in taxes?
- If your normal tax liability for the year is for example $5,000, you would still get the $8,000 credit.
How is the credit determined?
- The tax credit is equal to 10% of the purchase price to a maximum of $8,000. So, if you buy an $80,000 home, you'd get $8,000. If you buy a $150,000 home you'd get $8,000. If you buy a $50,000 home you'd get $5,000 which is 10% of the purchase price.
I hope that answers some questions.
If you are thinking of buying or selling a home in or around Atlanta, contact local expert Jen Bowman, Realtor and Broker Associate with Success Realty. 404-456-5024.
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Jen very good explaination of the Tax Credit, any first time homebuyer that is thinking of purchasing a house needs to take advantage of this before it is gone.
I am not a first time home buyer, due to co-owning a home 2 years ago, but I am a single income earning less than $75,000 per year. Would I qualify for this tax credit? I have heard so much, it's hard to know what's true!! Thanks.
Hi Tyra, You won't qualify for this one, but depending on what state you live in there are other tax credits. Georgia for example, has an $1,800 tax credit where you don't have to be a first time buyer or even plan to owner occupy the home. Feel free to call me with any other questions 404-456-5024.
Thanks.