Tax Credit for First Time Home Buyers
This is probably the best time to buy a home in Seattle that I have seen in Years. With low prices, low interest rates and an $8,000 tax credit, you can't beat this great time to buy. Only a few come along in a life time and this is it.
Here is a simple explanation of the First Time Home Buyer Tax Credit that is part of the stimulus plan. Essentially, first time home buyers with certain income limits who purchase a home in 2009 before November 30th, 2009 will receive a tax credit of up to $8,000.
- To qualify as a Seattle first-time home buyer as defined in the programs, the purchaser (and the purchaser's spouse) may not have owned a home in the three years prior to the purchase date of the home. Single family homes qualify for the program. The home must be the primary residence.
- The tax credit is subject to adjusted gross income limitations as follows: full credit for AGI less than $75,000 if single or less than $150,000 if married filing jointly; phased out for AGI up to $95,000 single/$170,000 joint.
- The amount for the credit is the lesser of 10% of the home purchase price or $8,000.
- $8,000 credit will not need to be repaid.
- No portion of the $8,000 is due upon sale of the home, if the home is owned for more than 3 years. If the home is sold within the first 3 years, the full amount of the credit is due upon sale.
The program is similar to the $7,500 Tax credit which applied to home purchases made in 2008 after April 9th. Some Differences are noted below:
- While a purchaser still owns the home, the $7,500 credit must be repaid in equal payments over a period of 15 years, starting with the 2010 tax filing.
- The $7,500 credit was not available to any purchaser utilizing state local revenue bond money to help finance the home purchase. There is no such restrictions on the $8,000 credit.
- Under both the $7,500 and the $8,000 programs, the credit will be claimed on the purchaser's income tax.
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