8000 Tax Credit for First Time Home Buyers

The Federal Government had its citizens captivated with the anticipation of the Senate’s $15000 tax credit that chris2 8000 Tax Credit for First Time Home Buyerswas quickly rejected in committee.  This credit generously provided homebuyers – not just first-time homebuyers – with a tax credit of up to $15000.  Instead, negotiations on the bill increased last year’s $7500 housing credit by $500 resulting in the approved $8000 tax credit, or 10% of the purchase price– whichever is less.  It also eliminated the requirement to payback the credit so long as you don’t sell your home for three years.

So what does this mean to you if you utilized the 2008 housing credit?  Under in the 2008 provisions, taxpayers will indeed by encumbered with its limitations including payback of the credit and realization that it was simply a 15 year no-interest loan, payable in 15 installments, beginning in 2010. Oh yes… and that it was a credit of $7500, $500 less than the 2009 version.

Under the umbrella of the 2009 version of this housing credit, only first-time homebuyers are eligible - eliminating a significant number of hopefuls from the original $15000 tax credit version.  “First-time” homebuyers, however, are defined as purchasers who have neither owned a home nor co-owned a home within the three years preceding their home purchase that must be made January 1 – December 31, 2009.  But remember… you must not have closed on a home in the three years preceding your closing on the 2009 property.  That said, your closing date of your 2009 purchase must be at least three years from any previous real estate closing in order to qualify for the $8000 tax credit.

And what about income and other eligibility limitations?  This version sets eligibility at $75,000 adjusted gross income for single taxpayers, and $150,000 for couples filing jointly. Additionally there is no exclusion against purchases under state or local tax-exempt mortgage revenue bond programs. As with the original $15,000 version, the purchase must be your primary residence and includes condominiums, single-family homes, co-ops, houseboats, and mobile homes, to name a few.

So how will this minor increase in housing tax credit help the waning economy? Congressional hopefuls site the possible “ripple down effects” of taxpayers spending on furnishings, appliances, brokerage commissions, moving costs, etc.  And as with the earlier incentive, they’re hoping it will be the jolt the economy needs to turn-around.

So how do you apply for the $8000 housing credit? It’s easy. Just claim it on your tax return – either your 2008 or 2009. No other forms or papers need to be filed. Taxpayers who submitted their returns can file amended returns for 2008 to claim the credit.

Although this final version is far less than anticipated from the original $15000 tax credit version, it’s worth a look.  If you qualify, and don’t pay $8000 in taxes, you get the rest as a check. For some…not bad at all.

19 Responses to “8000 Tax Credit for First Time Home Buyers”

  1. My husband got trans. to MIchigan 6/05 we had a house in Ind. trying to sell it. Oct. 2006 we did sell it. We have been leaving in a apartment since 6/05 it has been our permenant resident. We are now looking at houses are we able to get the 8,000?

  2. Thanks for your question, Pam.

    First-time home buyers purchasing a home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner. You would need to close on your new home at least 3 years from the date of closing on the sale of your home in Indiana.

    For further information, please see:
    http://www.federalhousingtaxcredit.com/2009/home2.html

    Thanks!
    Chris

  3. Chris,
    I am going through refinancing my home of 9 years. The rates have dropped considerably that it was very financially beneficial for me to this. I am single and make under $70K a year and I’m closing on 3/26/09. By refinancing, do I qualify for the housing tax credit? The financial broker told me that he had 3 tax people (accountants I’m assuming) read the bill and interpreted it as also including refinancing as well as new home buyers. Is this true? And if so, how do I go about applying for the tax credit?
    Thanks,
    Tracey G

  4. Hello Tracey,

    Unfortunately, this Tax Credit is for “First-time” homebuyers and not homeowners who refinance. As such, the definition of “First-time” homebuyers is purchasers who have neither owned a home nor co-owned a home within the three years preceding their home purchase that must be made January 1 – December 31, 2009. Refinancing is not covered under this credit.

    For further information, please see:
    http://www.federalhousingtaxcredit.com/2009/home2.html

  5. Chris,

    My husband and me moved from China to US on 4th Sept 2008. We are legal residents on L1 & L2 visas respectively.

    We fulfil the crieteria of being ‘first-time homebuyer’ and income limitations.

    Are we eligible for $ 8000 credit?

    Thanks,
    Sheetal

  6. Chris,

    I currently work overseas for the U.S. government. I want to buy a house in the U.S, in my home of record state of Texas. However, I live and work in Japan. Do I qualify for the 8000 tax break, or am I ineligible because it is not technically my “primary residence”?

  7. I was wondering….. Is the 15,000 credit completely dead? I’ve read different articles that contradict each other and I’m not sure where to go to find the status of this tax credit. Can you help me?

  8. I purchased a house to flip, Aug 2007, sold the house Feb 2008, I continued to live at my primary residence while remodeling my intended flip. I have since purchased a home April 2009 that is my primary residence, would I qualify for the credit? Also this other stulus of $600. I did not receive it, did not use Turbo tax, i used Tax Act and don’t recall any info about it/?

  9. I closed on a condo in May ‘09. Some of my friends (who are also recent first time home buyers) have already received their $8000 tax credit. Do I have to wait to file my taxes, or can I also receive my tax credit now?

  10. Your best bet is to checkout
    http://www.federalhousingtaxcredit.com/2009/faq.php
    http://www.federalhousingtaxcredit.com/2009/home2.html

    If you have further questions, you should contact your tax consultant.

  11. It would be most advantageous to talk with your tax consultant. Preliminary information can be found at:

    http://www.federalhousingtaxcredit.com/2009/faq.php
    http://www.federalhousingtaxcredit.com/2009/home2.html

  12. Information helpful to you can be found at:

    http://www.federalhousingtaxcredit.com/2009/faq.php
    http://www.federalhousingtaxcredit.com/2009/home2.html

    It would be wise for you to seek the assistance of a tax consultant.

  13. Here is a recent article regarding the revival of the $15,000 Homebuyer Tax Credit:

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aI3l8W6tflrg

  14. My sister and I are both disabled and in the process of buying our first home. We have both filed taxes for 2009 and we understand that we’ll have to have that amended in order to claim the $8,000 tax credit. Seeing that we’re both disabled (Social Security) are we eligible for the tax credit.

  15. Chris,

    I’ve heard that there is a stipulation regarding tax-exempt mortgage bond programs. I’m going through a grant program called “My Home, My Coast” which provides me with grants for down payment, closing costs, and part of the mortgage financed at a 0% rate. It’s through an organization called the Mississippi Gulf Coast Renaissance Corporation (www.msgcrc.com) but I can’t find this “mortgage bond program” term anywhere on this site. How do I find out if that is an MRB or do you know if that is considered an MRB?

    Brian
    Biloxi, MS

  16. I currently own a home (solely in my name). I am refinancing my house with my fiance who has never owned a home before. Would he qualify for the $8000 tax credit?

  17. my wife and i purchased a home in july but we did not go through a bank to do so. We pay the original owner of the home instead of the bank, and yes it was all legally drawn up through a lawyer and had a closing date just as if we went through a bank, would we qualify for the credit.

  18. Is the year of the tax credit depending on the date the purchase & sales agreement is signed or the date of closing?

    For example, if I sign a P&S in December of this year and close February of next year, can I get the tax credit in 2009 or do i have to wait for 2010 to claim?

  19. can someone tell me if i qualify for the 8000. taxcredit on new home purchase, i sold a mobile home 2 years ago, no land, just a mobile home, the q is a moble home w/o land considered a home??? thanks j.e. of texas