First Time Homebuyer $8000 Credit

I read some survey results this afternoon that indicated over half of prospective first time home buyers didn’t know about the $8000 credit.  Time to write a blog post!

The 2009 first time home buyer credit is limited to 10% of the home’s purchase price up to a maximum of $8,000.  We don’t have any real estate in Cambridge or Somerville available for less than $80,000 so buyers who qualify for the credit will be eligible for the full amount (with restrictions by income as explained below).

Who Is Eligible For the First Time Home Buyer Credit?

• First time home buyers who purchase a principal residence between January 1, 2009 and November 30, 2009.
• The purchase date is defined as the date the closing occurs and title transfers to the buyer

Who Qualifies As a First Time Home Buyer?

• The definition of a first time home buyer eligible to receive the credit is a buyer who has not owned a principal residence during the three years preceding the purchase.
• Both spouses’ homeownership history is considered when determining eligibility.  If either spouse has owned a home in the last three years neither will be eligible for the credit.
• If the homebuyers are not married the credit may be allocated to a qualifying partner even if other partner[s] do not qualify.
• Ownership of vacation or rental property not used as a principal residence does not disqualify a buyer.

What Kind of Property Qualifies for the Credit?

• A condominium, single family house, co-op, mobile home, or houseboat (!) used as a principal residence
• The home must be in the United States
• Vacation properties and rental properties are not eligible

What Are the Income Limits for the Tax Credit?

• Buyers with modified adjusted gross income  (MAGI) of up to $75,000 for a single first time home buyer and $150,000 for a married couple filing  a joint return are eligible for the full credit.
• The credit is reduced proportionally for MAGI between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for married buyers filing jointly.
• Single buyers with a MAGI over $95,000 and married buyers with a MAGI over $170,000 are not eligible for the credit.

Does the 2009 Credit Need to Be Repaid?

Unlike the credit available to buyers in 2008, the 2009 credit does not need to be repaid unless the home is sold before three years have passed.

Please consult your accountant or tax preparer for more information. The National Association of Realtors website has a number of articles and links about the 2009 first time home buyer credit.

Categories: Buyer Info

This entry was posted on Friday, March 27th, 2009 at 8:30 pm and is filed under Buyer Info. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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