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Marisa Ormando
Stan Chang
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"Marisa & Stan did more for us in the
first week than the previous agent did in four months.
From beginning to end our transaction was handle with
the utmost class and
attention."
Lisa & Ellis |
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How does $8000 home buyer tax credit work?
In order to understand the
details of the housing stimulus
bill or $8000 home buyer tax
credit as a first time home
buyer you need to understand the
following:
-
What is a
First
time home buyer?
The law
defines "First time home buyer"
as a home buyer who has not
owned a principal residence for
the last 3
years. For
married tax payers, both
you and your spouse must be
"first
time home buyers"
in order to qualify for the
housing tax credit. For
unmarried joint purchases,
either of the qualifying partner
may be a "first
time homebuyer".
In this case the $8000 housing
tax credit can be allocated to
any of the partners. Note
the if you have bought a home
3 years ago and have
rented it since then,
then it does not count as
principal residence and you may
still be eligible for the $8000
first time home buyer stimulus.
Time Period
In order to qualify for the home
buyer tax credit, the first time
home buyer must
close on the
purchase
of a new
house
before November 30, 2009.
How much tax credit will
I get?
-
The
total amount of tax credit a
home buyer gets is
equal to 10% of the
purchase price of the new house
up to maximum of $8000.
Income Limits for $8000 home
buyer tax credit: First
time home buyers with modified
gross annual income of $75,000
or less get full benefit
of this housing tax credit. The
tax credit is gradually reduced
for those with income between
$75,000 to $95,000.
For married taxpayers
with modified gross annual
income of $150,000 or less get
the full benefit and is
gradually reduced to zero for
modified gross annual income
between $150,000 to $170,000.
This is a Refundable Tax Credit:
Qualified
first time home buyers deduct
$8000 from their total tax
liability
and NOT the total taxable
income. The $8000
home buyer tax credit does not
have to be repaid.
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