Highlights of the 2009 First-Time Homebuyer Tax Credit
April 16, 2009 · · 5 Comments

tax-credit_faqRecently, I have received many questions from prospective homebuyers about the 2009 homebuyer tax credit bill — which provides $8,000 tax credit to first-time homebuyers for the purchase of their principal residence between January 1, 2009 and December 1, 2009.   I wanted to share with you a very informative FAQ (http://tinyurl.com/b8mysm)from National Association of Realtors (NAR) to address many of your questions and concerns about the details of the bill.

Here are some highlights:

  • You must be a “first-time” homebuyer, which is defined as someone who has not owned a home in 3 years prior to the day of your 2009 purchase.
  • The 2009 tax credit is refundable (i.e. IRS will send you a refund check if your tax liability is less the $8,000).
  • The income restriction for a full tax credit is $75,000 for individuals and $150,000 for married couples.
  • You may receive partial credit for income up to $95,000 for individuals and $170,000 for married couples.
  • The home must be your principle residence and owner-occupied.
  • You do not have to repayment 2009 tax credits; However, if you sell the property within 3 years of the purchase, your are required to pay back the full amount of any credit, including any refund you received from it.
  • You can claim your 2009 tax credit when filing your 2008 tax returns by April 15, 2009.
  • Close of escrow must occur on or before Dec. 1, 2009; if the property is under construction when purchased, you must occupy the home before Dec. 1, 2009.