November 23, 2017

First Time Home Buyers Tax Credit Update

 

 

FIRST-TIME HOMEBUYER TAX CREDIT 

As Modified in the American Recovery and Reinvestment Act

Major Modifications Shaded   

February 2009

    

If you are a first time home buyer in Seattle, here is the updated version of the tax credit.  Many people are in the process of filing taxes so it is important to understand the exact benefit of this interest free tax credit, essentially a loan.  If you have specific questions please comment below or email:  info@themortgagereel.com 

    

 

 

FEATURE

CREDIT AS CREATED JULY 2008

APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008

REVISED CREDIT –

EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009

Amount of Credit

Lesser of 10 percent of cost of home or $7500

Maximum credit amount increased to $8000

Eligible Property

Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.

No change

All principal residences eligible.

Refundable

Yes.  Reduces (or can eliminate) income tax liability for the year of purchase.  Any unused amount of tax credit refunded to purchaser.

No change

Purchasers will continue to receive refund for unused amount when tax return is filed.

Income Limit

Yes.  Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return).  Phases out above those caps ($95,000 and $170,000).

No change

 

Same income limits continue to apply.

 

First-time Homebuyer Only

Yes.  Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.

No change

Still available for first-time purchasers only.  Three-year rule continues to apply.

Revenue Bond Financing

No credit allowed if home financed with state/local bond funding.

Purchasers who utilize revenue bond financing can use credit.

Repayment

Yes.  Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing.

No repayment for purchases on or after January 1, 2009 and before December 1, 2009

Recapture

If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.

If home is sold within three years of purchase, entire amount of credit is recaptured on sale.  Applies only to homes purchased in 2009.

Termination

July 1, 2009 

(But note program changes for 2009)

December 1, 2009

 

 

Effective Date

Purchases on or after April 9, 2008 and before January 1, 2009.  Repayment to begin for 2010 tax year.

All revisions are effective as of January 1, 2009

 

 

 

 

 

 

 

 




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  1. Credit Crunch » First Time Home Buyers Tax Credit Update says:

    […] Money employment & careers | money-employment.marc8.com wrote an interesting post today onHere’s a quick excerpt   FIRST-TIME HOMEBUYER TAX CREDIT  As Modified in the American Recovery and Reinvestment Act Major Modifications Shaded    February 2009      If you are a first time home buyer in Seattle, here is the updated version of the tax credit.  Many people are in the process of filing taxes so it is important to understand the exact benefit of this interest free tax credit, essentially a loan.  If you have specific questions please comment below or email:  info@themortgagereel.com.   […]

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