The current legislation grants a tax credit of up to $8,000 to first-time home buyers; the home must close by November 30, 2009. Purchase contracts need to be signed by late September or early October to ensure a closed sale before the deadline. At the current time, there has been no decision on an extension of the program.
Who Qualifies? To qualify as a “1st-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible? The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be? The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:
What If Buyer(s)’ Income Exceeds These Limits? Some buyers may still be eligible for the credit. The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid? No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit must be repaid from the sale.