2009 First time homebuyer tax credit – what is it, how much is it, and how to get it
Its $15,000. No its $7,500. No its $8,000. It has to be repaid. No it doesn’t. Its available to all homebuyers. No the tax credit is only for first time homebuyers. Is this a 2009 version of Abbot and Costello’s Who’s on first, What’s on second, I don’t know’s on third?
All this leads to only one place. The place of mass confusion which is why I have held off on writing a post about the new version of the homebuyer tax credit. That is until all the back and forth haggling was done and our President signed the $787 Billion Economic Stimulus Bill (known as the “American Recovery and Reinvestment Act of 2009”) into law.
And after reviewing the 1,091 page bill now turned into law, I am excited to say a tax credit for homebuyers did make it into the final version. The credit is not as large as the National Association of Realtors was hoping but a credit at least survived. The big advantage the homebuyers tax credit in the American Recovery and Reinvestment Act of 2009 has over the 2008 Housing and Economic Recovery Act is the tax credit does not have to be repaid.
One small disclaimer … when I said I reviewed the 1,091 page bill, I did not review the entire bill just the sections that pertained to the homebuyer tax credit.
What is the homebuyer tax credit?
- A tax credit for eligible first-time homebuyers who purchase either a resale or new home. An eligible first-time homebuyer is a buyer who, along with his or her spouse, has not owned a principle residence during the last three years.
- The full tax credit is available for individual taxpayers with a modified adjusted gross income up to $75,000 and for married taxpayers with adjusted gross income up to $150,000. It is completely phased out for individual taxpayers and married taxpayers with a modified adjusted gross income of $95,000 and $170,000 or higher, respectively.
- A tax credit reduces your tax liability dollar for dollar
How much is the first time homebuyer tax credit?
- $8,000 ($4,000 if married filing separately) or 10% of the purchase price of the home whichever is less.
- Unlike the homebuyer tax credit in the 2008 Housing and Economic Recovery Act, the tax credit DOES NOT require repayment. It is a TRUE tax credit. (FREE MONEY which is even better than interest-free money)
- If you sell the home and net a gain within the first 36 months after you purchased the home, the government wants all of the tax credit you received back.
- If the home ceases to be your primary residence within the first 36 months after you purchased the home, the government wants all of the tax credit you received back.
How to get the first time homebuyer tax credit?
- Be a first time homebuyer and purchase a home between January 1, 2009 and before December 1, 2009.
- Take the credit on your 2009 Federal Income Tax return or you can take the credit on your 2008 Federal Income Tax return if you file an amended return.
We know this is a lot of information to absorb so if you have any questions give us a call at either 281.300.3141 or 281.804.8626 and we would be happy to answer them. Don’t let your chance to get some FREE MONEY courtesy of our Federal Government and the opportunity to get a home mortgage at a historically low interest rate pass you by.
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Read Also: If you are a first time homebuyer and purchased a home in 2008, the tax credit which applies to your purchase is different than the 2009. To find out more about the tax credit available on 2008 purchases read – 2008 First time homebuyers tax credit